It happened to me last time when I have a fresh drupal instance install on my local machine, when I tried to enable "Clean URL" in the admin setting, it bing me back to the homepage. After digging the web for a while, I found that the cause of this is the setting in the apache httpd.conf file. Refer to: http://drupal.org/node/15365 for detail. Basically what we need to do is to enable the rewrite module. After enabled the module, restart the server, and it would work perfectly.