Figured it out. I was missing the following from .htaccess. (I missed that part in the setup doc).
# If imported from SMF, you can include the following lines to make sure existing urls don't break.
RewriteRule ^forums/index.php/topic,(.*).msg(.*).html$ forums/?action=thread&thread=$1&i=1
RewriteRule ^forums/index.php/topic,(.*).(.*).html$ forums/?action=thread&thread=$1&i=1&start=$2
RewriteRule ^forums/\?topic=(.+).(.+)$ forums/?action=thread&thread=$1&i=1
RewriteRule ^forums/index.php/board,(.*).(.*).html$ forums/?action=board&board=$1&i=1&start=$2
RewriteRule ^forums/\?board=(.+).(.+)$ forums/?action=board&board=$1&i=1
# Discuss rewrite rules
RewriteRule ^forums/thread/([0-9]+)/(.*)$ forums/?action=thread&thread=$1 [L,QSA]
RewriteRule ^forums/u/(.+)$ forums/?action=user&user=$1 [L,QSA]
RewriteRule ^forums/board/([0-9]+)/(.*)$ forums/?action=board&board=$1 [L,QSA]
RewriteRule ^forums/category/([0-9]+)/(.*)$ forums/?category=$1 [L,QSA]
RewriteRule ^forums/(.+)$ forums/?action=$1 [L,QSA]
RewriteRule ^forums/(.+)/$ forums/?action=$1 [L,QSA]
