that seems odd.
try this
$fp1 = fopen('file1', 'r');
$fp2 = fopen('file2', 'r');
$fp3 = fopen('file3', 'w');
then:
read a line from file1, write to file 3 and write a space/tab after the line. then read a line from file 2 and write it to file 3. repeat until you reach eof. remember that file1 may reach eof before file 2 and vice versa.
hope that got you on the right track. check out the file functions on php.net
p.