1. Log in to your VB3 admin panel.
2. Select "vBulletin Options" from the navigation frame
3. Look in the listbox for "Search Engine Friendly Archive"
4. Ensure "Forum Archive Enabled" is set to yes
5. Click save
6. All done.
As the text says: "works only under the Apache web server with PHP compiled as a module". If you're not sure if that applies to you, speak with your hosting company's support department.
If you have apache, which most probably you do, then you should be fine, as you say you have installed a bunch of php modules and didn't simply run ./configure without additional options when installing php.