I just set up Typo again, for my wife's blog. She wanted the url http://erin.fugal.net/blog, the important part here is the /blog bit at the end. Rails in general has traditionally been fairly hostile to this prefix thing, but Typo has smoothed things out considerably. I've blogged about this before, but typo has changed in the meantime. Here's what you do:

First, in your Apache2 config change the ProxyPass and ProxyPassReverse lines to have /blog in both places, e.g.

ProxyPass             /blog http://localhost:4907/blog
ProxyPassReverse      /blog http://localhost:4907/blog

Then, tell typo about it:

cd /path/to/my/typo
typo config . prefix-url=/blog
typo restart .

Finally, you may need to flush the cache and/or reactivate the theme of your choice.

Kudos to the typo folks for making this relatively painless. Getting it to work in the "good ol' days" was truly painful.