Your ISP may not have set apache (it's using apache+PHP, right?) to handle the .php file extension.
Make sure they have this line in their httpd.conf file
AddType application/x-httpd-php .php
For some reason, IE doesn't care. I had a similar problem on a new server some time ago. I couldn't figure out why Netscape would only show source for files with the .html extension but IE would -- and then I saw that I hadn't told apache that .html (only .htm is enabled by default I think) was in fact an HTML file.
I feel about 95% sure that your ISP just needs to tweak their httpd.conf to recognize the .php extension. Contact them and see what they say about that; they may be very willing to do it or they may be hesitant and tell you to use some other extension.
In the meantime, try another extension like .php3 or .phtml to see if those might be valid in their current setup of apache+PHP.