wp-signup.php and .htaccess question

I have wrote the following rule in our WP MU 3.x installation .htaccess file located under httpdocs:

RewriteRule ^sign-up/$ wp-signup.php

so that signup page will be under http://www.domain-name.com/signup/
instead of

yet each time I try to create a new blog once I enter the user name, email and click Next I get routed to the following page:


So any idea what I might be doing wrong here?

Thanks in advance for your time