Well firstly I have HTML in Template files. PHP in other PHP files (so no HTML). Then a Templating System that users templating values to be replaced to create a webpage. (one good templating System is smarty but i dont use it).
Also you dont necessarily need to have all functions in one file. Give the file a useful name. Only have those types of functions in that file. So if its user.php it will have functions related to the user.
You may want to read the Newbies Stickied thread It may help you a little, it doesnt exactly go into Functions though.