I had an issue recently with friendly URLs and GoDaddy; I don’t remember where I found this in the forums, but here is my htaccess file, at least all the stuff that is not commented out. Give it a shot, see if it works. GoDaddy needs slightly different rules than the regular htaccess.
RewriteEngine On
#The following changes from www.example.com to /example.com - good for SEO friendly URLs
RewriteCond %{HTTP_HOST} .
RewriteCond %{HTTP_HOST} !^your-domain-here\.com [NC]
RewriteRule (.*)
http://your-domain-here.com/$1 [R=301,L]
RewriteCond %{REQUEST_FILENAME} !-f
RewriteCond %{REQUEST_FILENAME} !-d
RewriteRule ^(.*)$ /index.php?q=$1 [L,QSA]
RewriteCond %{HTTP_USER_AGENT} ^.*internal\ dummy\ connection.*$ [NC]
RewriteRule .* - [F,L]
