Are you adding this:
%postname%(both % are required, no spaces)
in your custom setting box?
After saving your setting, stay on this page and look for a new box that says it could not write to your .htaccess file and lists the rewrite rules required in your .htaccess file. IF so, you need to manually add these rules.
Also, using permalinks has some server requirements, check this link and discuss with your host.
Changing a permalink should have no effect on page layout.