Here we go … By default, XAMPP will have folder installation in C:\xampp. Now open C:\xampp\apache\conf\httpd.conf using your favourite text editor (i prefer to Notepad++ since they very powerfull than original notepad) and find this code. If you using Notepad++ like me just press Ctrl+G and enter 118 to go to lines 118.
(#LoadModule rewrite_module modules/mod_rewrite.so)Remove mark (#) from begining code. Now your code should be like this
(LoadModule rewrite_module modules/mod_rewrite.so)Save file and close. Your permalink now is ready to use. Anyway to setting permalink in wordpress go to Dashboard > Settings > Permalinks. Usually i use only “/%postname%/” setting to more friendly in search engine. Of course it would be effective if you do this for online site.
THIS POST IS TAKEN FROM ( http://blog.smileylover.com/wordpress-permalink-in-localhost-xampp/)
See also the below links:-
http://www.lancelhoff.com/how-to-make-wordpress-permalinks-work-in-xampp/
http://www.techronnati.com/blog/wordpress-blog/wordpress-permalinks-work-localhost/