Does it work in other folders? And what version of SilverStripe are you using?
It should be o.k. for version 2.3, but I haven't made any changes for 2.3.1 or more recent editions. It is possible that changes in the core have made the module obsolete. Hopefully I can give it some attention this week.
It shouldn't need explicit rules defined for each sub-folder - I believe the rewriting rules were supposed to massage the URL into something usable instead.
I need to review it and add some improvements - (particularly, need to have a look at what effect the new 'rewriteless' installation has) - I'm just lacking in time. It would be great if we could get it into trac so users can contribute patches too :)
Do you have a version available which is running with ss2.3? The current downloadable version is quite old and not working with ss2.3, in the svn there is a newer version available, but I didn't test yet.