Ray, hopefully this will help out a bit on top of the answer you've already received.
Apache (the web serving program) reads the httpd.conf file. The httpd.conf file holds all of the settings that the program needs to run.
Each .htaccess file builds on the httpd.conf file. Each .htaccess file is in the same format and can even have the same options as found in the httpd.conf file. A good way to think of .htaccess files is that they build on the .htaccess file.
As mentioned above, think if you had a whole bunch of .htaccess files in different directories. That would take a long time and a lot of work for Apache to phrase and remember. It's not a big deal on small sites.
However, on large sites, it's definatly not a good idea. First, it does slow the whole server down. Also, it becomes a sysadmin nightmare if you need to make a change to more then a couple .htaccess files. The best solution really depends on what you're doing with all the .htaccess files. Maybe Mod_Rewrite is the best solution, or maybe it's just a matter of optimizing your httpd.conf file.
Fell free to drop me an ICQ or give me a call in the office.
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