Good tip from rjcbear.
People need to understand that for some reason, X-Cart thought it would be really funny to have the default .htaccess file include the text:
So, you must change it or create a new file. I simply edited it, and copied it to my two image folders (Thumbnails & Detailed Images) that I have created under the .../xcart/files/ directory.
Also, you won't see the .htaccess files on most FTP programs. They are hidden files. I have to use my Control Panel File Manager application (off of my hosted server) to see them.