I'm not sure, but in ASP/VB there are specific functions used to "prepare" SQL statements. I haven't seen any similar functions in PHP, so I don't know what you're refering to in the manual.
Basically, "preparing" a query means writing a query, but leaving room for the actual data. It's useful for when you need to execute many similar SQL queries - like when you're inserting lots of similar data into a table.
In PHP, I've gotten along by writing the query as a string and using the sprintf function to insert the data. For instance:
<?php
$query_format = '
INSERT INTO my_table
(field1, field2, field3)
VALUES
('%s', 'some_constant_value', 4458823)
';
// some looping construct to do this multiple times:
$query = sprintf($query_format, $field1_value);
mysql_query($query);
?>
-Keegan