I haven't used the Location directive, but I can show you my .htaccess file, which allows me to run Embperl on a virtual host on a mod_perl shared hosting plan (I know running mod_perl apps under shared hosting entails the risk of others wreaking havoc on my app, but I don't currently mind that risk).

I use the FilesMatch directive, which will make the Embperl handler be used for all files matching a given regular expression.

PerlSetEnv EMBPERL_SESSION_CLASSES "MySQL MySQL"
PerlSetEnv EMBPERL_SESSION_ARGS "DataSource=dbi:mysql:xxx UserName=xxx
+ Password=xxx LockDataSource=dbi:mysql:xxx LockUserName=xxx LockPassw
+ord=xxx"

SetEnv EMBPERL_COOKIE_PATH /

<FilesMatch ".*\.htm.?">
    PerlModule MD5
    PerlSetEnv EMBPERL_FILESMATCH "\.htm.?|\.epl$"
    PerlSetEnv EMBPERL_OBJECT_BASE base.htm
    SetHandler perl-script
    PerlHandler HTML::EmbperlObject
    Options ExecCGI
</FilesMatch>

<FilesMatch ".*\.pl"> 
    SetHandler perl-script
    PerlHandler Apache::Registry
    Options +ExecCGI
</FilesMatch>
[download]

Note (aside from your question) that I use the built in session handling capability, and I set EMBPERL_COOKIE_PATH to /. That is necessary to make sure your visitors get only one cookie set at the base path, and not individual sessions for each subdirectory in your application.

Hope this helps.