Thanks for the post here: http://wordpress.org/support/topic/solved-permalinks-working-in-apache2-ubuntu-1010?replies=6
Searched long and hard for this solution.
Ubuntu server fresh install permalinks not working.
1. The additional step I had to take was to edit /etc/apache2/sites-enabled/000-default.
In that file you’ll find an AllowOverride setting for /var/www, saying “None”.
Change the setting to say: AllowOverride All
a.sudo chown -v :www-data "/enterYourFilePathHere/.htaccess"
b.sudo chmod -v 664 "/enterYourFilePathHere/.htaccess"
c.sudo a2enmod rewrite
d.sudo /etc/init.d/apache2 restart
It was that step 2.c I was unaware of. Thanks to the poster I can move ahead now with a migration.