What I did was :
Admin Control Panel>>>Settings>>>Options>>>Server Settings and Optimization Options>>>selected Mod Rewrite Friendly URLs

Than in forum root where is my vbulletin I added default vbulletin .htaccess code, found in do_not_upload>>>rewrite>>>apache2>>>forums folder

and this is how my .htaccess in forum root was looking:


RewriteEngine On
RewriteCond %{HTTP_HOST} !^www\. [NC]
RewriteRule ^(.*)$ http://www.%{HTTP_HOST}/$1 [R=301,L]

# This file is only needed if you have set the Forum Component URL in your admincp and you are
# using the mod_rewrite option for friendly urls. If this is the case, copy this file
# to your forum component stub directory.

# If you are having problems or are using VirtualDocumentRoot, uncomment this line and set it to your forum component directory.
# RewriteBase /forum-stub-directory/

# If you are having problems with the rewrite from content/ to content.php, uncomment this line to turn MultiViews off.
# Options -MultiViews

RewriteCond %{REQUEST_FILENAME} -f [OR]
RewriteCond %{REQUEST_FILENAME} -l [OR]
RewriteCond %{REQUEST_FILENAME} -d

RewriteRule ^.*$ - [NC,L]

# Forum
RewriteRule ^threads/.* showthread.php [QSA]
RewriteRule ^forums/.* forumdisplay.php [QSA]
RewriteRule ^members/.* member.php [QSA]

After this all seems to be working just fine, than firsi thing I noticed is on http://nibbler.silktide.com/ is that my grades dramatically were dropped, this was looking like main problem "URL format" ...dirty urls

Than I checked my forums more and found that forums with non English characters cant be opened, threads as well

Did try to add code from "CMS" folder under apache folder...also did try to use another .htaccess codes presented here:
http://www.vbulletin.com/forum/forum/vbulletin-4/vbulletin-4-questions-problems-and-troubleshooting/333733-mod-rewrite-friendly-urls-htaccess

But all of them had problem with non English characters as mentioned above.

Anyone have a clue how can I use vbulletin default .htaccess code that will work for me in order to Rewrite Friendly URLs ?

Thank you