Right, thats how they are parsed, but
But when you put a $ in front of it, your telling php that it is now a variable, meaning $echo is not a reserved word.
Regardless of how php treats these things internally, a text editor can quite easily tell the difference between, say, echo and $echo.
I've been using BBedit 6.0 for coding php for a while now (and I've used it for Perl for ages), and it works quite well.
brad