Are you sure that your server is configured to allow rewrites?
1. Rename the ht.access to .htaccess.
2. In the Manager's System Settings, set Use Friendly URLs to Yes.
How do you access your site? Is it domain.com, or is it domain.com/foldername? If it is domain.com/foldername, then you need to edit the .htaccess file to have the RewriteBase line reflect that:
The reason for the redirects error is that it's not getting the proper URL, so it doesn't find the page. When MODx can't find the page, it redirects to your "error" page using a friendly URL, which itself isn't found, causing MODx to redirect to the "error" page ad infiinitum.