You might try searching the internet for ".htaccess Options not allowed here".
A suggestion I found (using google) is:
Check to make sure that your httpd.conf file has AllowOverride All.
A .htaccess file that works for me on Mint Linux (placed in the Laravel /public folder):
# Apache configuration file
# http://httpd.apache.org/docs/2.2/mod/quickreference.html
# Turning on the rewrite engine is necessary for the following rules and
# features. "+FollowSymLinks" must be enabled for this to work symbolically.
<IfModule mod_rewrite.c>
Options +FollowSymLinks
RewriteEngine On
</IfModule>
# For all files not found in the file system, reroute the request to the
# "index.php" front controller, keeping the query string intact
<IfModule mod_rewrite.c>
RewriteCond %{REQUEST_FILENAME} !-f
RewriteCond %{REQUEST_FILENAME} !-d
RewriteRule ^(.*)$ index.php/$1 [L]
</IfModule>
Hope this helps you. Otherwise you could ask a question on the Laravel forum (http://forums.laravel.com/), there are some really helpful people hanging around there.