Joomla! tries to automatically detect your web site root URL (ie: http://www.joomace.net) by itself because this information is needed in many operations, especially those dealing with making links and URLs
If you see error "500 - Internal server error" generated by your webserver after you have installed the AceSEF component or after you did some adjustments in your .htaccess file, there is probably some misspelling or invalid configuration in the .htaccess file, or the .htaccess file usage is not allowed in your environment.
This error comes out if any of the extensions you've installed is not 1.5 Native compatible, even if it seems that it is. Of course that this extension is not AceSEF, if so you would get this error message : "Restricted access".
Please note, that if base href generation is used, then all relative anchors, such as just "#anchor", or all other resources using relative paths (such as "/images/myimg.png" or "myfiles/file1.pdf") are automatically translated with the base href URL.
This known as "Duplicated URLs" issue and happens because there exists 2 links to the content/category in your site - 1 with category list layout and the other with blog layout.
If you have an AceSEF extension for your component you dont NEED to use router.php file unless you dont like the URL rewriting of the extension in comparison with router.php's one.