Hot linking question

[juggernaut]

1) will an .htacess file work on a windows box?
2) this is the code I want to use to allow linking from ref

RewriteEngine On
RewriteCond %{HTTP_REFERER} !^http://(www\.)?example\.com/dir/ [NC
RewriteCond %{HTTP_REFERER} !^$
RewriteRule \.(jpe?g|gif|bmp|png)$ images/nohotlink.jpg [L]

The instructions for this code are
To allow hotlinking images only if the REFERER (sic) is from a specific directory from your domain:
What do they mean by Ref (sic)? Is this a text file that I would have the ref domains listed in? I am linking with other pages now and do not want to screw myself by not allowing sites that shold be able to link. Or am I looking at this all wrong.
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