is that only valid on apache2?

No. For Apache 1 it should give a module too.

I'm getting a 500 when I try to add that however i have verified that it is enabled in my phpinfo

Alfie talked about gzip compression wich is made by the server. Therefore there has to be installed the according server module. In doubt ask your hoster.

In contrast the PHP module for gzip gives you the ability to gzip any files via a PHP script.

Tschö, Auge