The header to send back is :
Header("HTTP/1.1 304 Not Modified");
To determine when to do so, you'll have to examine the If-Modified-Since header the client sent you. To get the Unix time from it, just do this :
$t=strtotime($HTTP_IF_MODIFIED_SINCE);
Finally, when returning a real page, don't forget to send the appropriate Last-Modified header with the time that reflects the page's timestamp :
$GMT=gmstrftime("%a, %d %b %Y %H:%M:%S",$t)." GMT";
Header("Last-Modified: $GMT");
Et voilà, it should work.