Using .htaccess Options Indexes versus WebFM versus an index.php for Direction Listings
I've run into the problem of letting authenicated users access /sites/default/files/folder1/folder2 and see a full directory listing. Typically I solve this with htaccess (Options Indexes, IndexOptions +ScanHTMLTitles -IconsAreLinks FancyIndexing and other values). However, I see that Drupal's webroot/.htaccess does not play nicely.
I've tried all sorts of htaccess solutions found via search (401.shtml, ErrorDocument 401 "Unauthorized", DirectoryIndex index.php index.html, Options FollowSymLinks +Indexes). The apache 2.x error log now just has "...Attempt to serve directory: /.../sites/default/files/folder1" offering no clues.
So, I got a web folder directory listing script index.php at http://www.evoluted.net/community/code/directorylisting.php
and it worked for folder1/ but not for folder1/folder2/.
So, my question is for Drupal 6.10 to 6.12, what is the solution? I'd like a .htaccess method, but I'd be happy to get by this bottleneck. Also, the user will be uploading DBF and CSV files into these folders.
I'm open to a Drupal File Manager solution, but I've now come across so many of them. Any recommendations? I imagine that both the directory listing and uploading might be solved by one FM? WebFM seems good, but I have yet to go fully into the learning curve of it.

Ical feed
Solution
The issue was an addition to the webroot /.htaccess default file that Drupal provides of a .htpasswd password and userid. Removing that solved some of the issue. The front page must then be changed for anonymous users, to hide the content (just the login prompt), and even the header had to change. Ugh. All to keep the 'test' from public view. Drupal must do this better, that is support a 'test' site, full time on the internet from public view, including who the test site is for (so to not compete with SEO of the real public site). A "fake" front page capability needs to be available. Hmm, something for me to do?