Currently I know both PHP and Java well.
I would say there is no clear-cut better language in all situations. PHP would be the best for projects that need to up and running quickly or that are not too intricate. Being that PHP doesn't have any kind of servlet technologies, etc if you need akin to that of course Java would be the best way to go. However, with Java speed is a factor, a factor that for the part does not exist with PHP.
As far as Object Orientation, it can accomplished better with Java but PHP 4 does support classes and OO at a lower level and it is very effective for most applications. Allowing the writing of cookies and such for an object. In my use of OO PHP I've been very happy. Granted you can do the higher level things supported by an OO Language like Java but PHP does provide very good OO and I have a feeling it will get better in the future.
Hope that helps!