I'm afraid my input here is just to give you some feedback. I'm afraid I really haven't done much with Apache configs. But in your httpd.conf file above, shouldn't the last line have a hyphen like the rest? That is, shouldn't it be
Action application/x-httpd-PHP3 "/PHP3/php.exe"
and NOT
Action application/x-httpd PHP3 "/PHP3/php.exe"
(notice this shows "x-httpd PHP3" with the last hyphen missing)?
Also, not that case sensitivity is an issue in the Windows world, but it may be an issue for Apache (though I can't say from personal experience). And according to the PHP manual (http://www.php.net/manual/install-windows95-nt.php),
You must edit your srm.conf or httpd.conf to configure Apache to work with the PHP CGI binary.
Although there can be a few variations of configuring PHP under Apache, this one is simple enough to be used by the newcomer. Please consult the Apache Docs for further configuration directives.
ScriptAlias /php/ "c:/path-to-php-dir/"
AddType application/x-httpd-php .php
AddType application/x-httpd-php .phtml
Action application/x-httpd-php "/php/php.exe"
I'm afraid beyond that I'm not much help. :-/