Shoot... sorry I'm late to the game here...
The way I typically find templates is with a simple grep command from the terminal. Just a
Code:
grep -r 'function fn_name' /path/to/wordpress/dir/
returns the file it's in. I find it much quicker than looking through the codex or anything like that. Of course, if you have 10.4 you can do the same with spotlight (or so I would imagine).
As a word of warning on this little trick - don't try to go too deeply with this. It's so easy to reference functions this way that I find myself looking up functions within functions and so on. Trouble is, I can only remember about five levels of looking up stuff before I forget what I was originally trying to do! You can be looking up function calls all night long from one to the next and forgetting where you came from. (I read somewhere (here?) that the brain can only think about 6 or 7 things simultaneously - go beyond that and you start forgetting stuff)
It looks like you already found this out, but Permalinks do require mod_rewrite for an Apache server. I'm kinda surprised that your server doesn't support it - most do in my experience.