THANK YOU, THANK YOU, THANK YOU!
I have been struggling with 1and1.com and THESIS for weeks. This solution along with placing a file called php.ini (with the single line of text memory = 20MB) into the wp-admin folder FINALLY makes the error 500 go away.
I did not have this issue with default themes, for what it is worth.
I was getting it any time I attempted to activate a plugin using WordPress 3.0 and Thesis 1.7
