the .html ending is not bad, but after a lot of changes in the url structure i noticed it works best for me. and a normal url structure should look like yoursite.com/keyword/whatever/ and not yoursite.com/keyword.html ! both works but i dont know what happens when you have another directory after the .html like yoursite.com/keyword.html/anotherdirectory/ looks a bit funny isnt it?...
but anyways both ways are ok. just look that the keyword is near the yourdomain.com
and not at last or an =?19 ending or whatever. whats bad for example is the year/month/day/post structure. the keyword is here at last and when a surfer clicks an archive post and you have your wordpress data in a special blog folder the url looks like yoursite.com/blog/archive/year/month/day/keyword/ and that sucks.
btw. the question about your .htaccess well wordpress is writing the structure to it and when you map it to 666 or 777 wordpress is able to write it how you want. otherwise your new link structure will be a 404