It's a change in how the PHP engine handles the code.
With PHP 3, the processing was done one statement at a time, with the results immediately generated. That's pretty much how all simple scripting languages (such as bash, ksh, etc.) work.
With PHP4 and 5, the entire script is compiled to an intermediate format, then the intermediate format is executed by a virtual machine. It's the same method used by Perl. The advantage is performance, particularly in loops.
Because of this change, it's possible to cache the intermediate image, which is what the various accelerators do.
I saw a note the other day from a guy who had some code to take the intermediate image and convert it into a native executable (machine language) image, which would in essence make PHP a full compiled language. It's not a release-quality product but it's possible.