What is wrong with my PHP on my apache2 web server (OS X 10.6)
You need to include the following directive in your httpd.conf file:
AddType application/x-httpd-php .php

Edit
To make this answer more useful for others, the full configuration for php on apache2 is:
LoadModule php5_module libexec/apache2/libphp5.so

Or whatever your path is your php module. This is the default path which come with Mountain Lion. Al I had to do was uncomment it. This is followed in the apache2.conf file with:
&lt;IfModule php5_module&gt;
    AddType application/x-httpd-php .php
&lt;/IfModule&gt;