I can confirm this. But this is bug in drupal5 package, not apache2.
By default, there should be "RewriteBase /drupal5" in
/usr/share/drupal5/.htaccess.
** Changed in: drupal5 (Ubuntu)
Sourcepackagename: apache2 => drupal5
Importance: Undecided => Medium
Status: New => Confirmed
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gutsy beta apache rewrite returns path not url
https://bugs.launchpad.net/bugs/146981
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