You might want to try Sambar server from http://www.sambar.com
It's amazingly easy to set up. I haven't tried setting up PHP with PWS, but it can't be much easier than setting it up with Sambar, and Sambar is a "real" webserver.
Somehow, I didn't have to follow just about ANY of the directions that came with PHP to get it to work. I didn't copy the PHP ini to my Windows directory, I didn't copy the ISAPI dll anywhere... I just created a PHP directory on my C drive, stuck the PHP files in it, and changed one line in mappings.ini for Sambar to make it run .php files (pointing it to where I put PHP).
(I also changed the root directory of the local web to somewhere outside of the Sambar directory, but that's not necessary for PHP 🙂
Anyway, it was the easiest thing ever, and based on my experience so far, I'd highly recommend Sambar for local development with PHP.
Keith