[Plugin: W3 Total Cache] W3 messing up my htaccess?

Yesterday I had trouble with logins into wordpress and loading admin functions in there. It would give me http 500 errors. After contacting hostgator they told me about some issues with the htaccess and W3 – especially that there is a huge blank space between my redirects and W3 entries. Why is that? I have deleted that “chunk” now and WordPress seems to be working fine again but Im wondering if W3 will cause this again? Here’s what hostgator told me:

1. There are URL rewriting rules in your .htaccess file (which appear to be used by W3TC) which are causing the HTTP 500 error. I temporarily renamed the file. The file itself has a few problems.

1a. There are several sections that are included between comments like this:

“# BEGIN W3 Total Cache”

and

“# END W3 Total Cache”

1b. There is a very large number of rewrites in place, which is quite difficult to manage.

1c. There is a very large gap of blank “whitespace” in the middle of the file. I’ve removed this blank space from the output below.

1d. The file is in Windows “CRLF” format, instead of UNIX “LF” format. This has to do with the way in which lines are terminated. It can be thought of like a typewriter needing to move the carriage down to the next line. Ih the UNIX/Linux realm, this produces extra characters in the file, which may cause problems.