PHP is mainly focused on server-side scripting, You can do anything any other CGI program can do, such as collect form
data, generate dynamic page content, or send and receive cookies. But PHP can do much more.

There are three main areas where PHP scripts are used.

• Server-side scripting. This is the most traditional and main target field for PHP. You need three things to make this
  work. The PHP parser (CGI or server module), a webserver and a web browser. You need to run the webserver,
  with a connected PHP installation. You can access the PHP program output with a web browser, viewing the PHP
  page through the server. All these can run on your home machine if you are just experimenting with PHP
  programming.
  
• Command line scripting. You can make a PHP script to run it without any server or browser. You only need the PHP
  parser to use it this way. This type of usage is ideal for scripts regularly executed using cron (on *nix or Linux) or
  Task Scheduler (on Windows). These scripts can also be used for simple text processing tasks.
  
  
• Writing desktop applications. PHP is probably not the very best language to create a desktop application with a
  graphical user interface, but if you know PHP very well, and would like to use some advanced PHP features in your
  client-side applications you can also use PHP-GTK to write such programs. You also have the ability to write cross-
  platform applications this way. PHP-GTK is an extension to PHP, not available in the main distribution.

PHP can be used on all major operating systems, including Linux, many Unix variants (including HP-UX, Solaris and
OpenBSD), Microsoft Windows, Mac OS X, RISC OS, and probably others. PHP has also support for most of the web
servers today. This includes Apache, Microsoft Internet Information Server, Personal Web Server, Netscape and iPlanet
servers, Oreilly Website Pro server, Caudium, Xitami, OmniHTTPd, and many others. For the majority of the servers PHP
has a module, for the others supporting the CGI standard, PHP can work as a CGI processor.

So with PHP, you have the freedom of choosing an operating system and a web server. Furthermore, you also have the
choice of using procedural programming or object oriented programming, or a mixture of them. Although not every
standard OOP feature is implemented in PHP 4, many code libraries and large applications (including the PEAR library) are
written only using OOP code. PHP 5 fixes the OOP related weaknesses of PHP 4, and introduces a complete object model
.

With PHP you are not limited to output HTML. PHP's abilities includes outputting images, PDF files and even Flash movies
(using libswf and Ming) generated on the fly. You can also output easily any text, such as XHTML and any other XML file.
PHP can autogenerate these files, and save them in the file system, instead of printing it out, forming a server-side cache
for your dynamic content.

One of the strongest and most significant features in PHP is its support for a wide range of databases. Writing a
database-enabled web page is incredibly simple. The following databases are currently supported:

Adabas D	InterBase	PostgreSQL
dBase	FrontBase	SQLite
Empress	mSQL	Solid
FilePro (read-only)	Direct MS-SQL	Sybase
Hyperwave	MySQL	Velocis
IBM DB2	ODBC	Unix dbm
Informix	Oracle (OCI7 and OCI8)
Ingres	Ovrimos

We also have a DBX database abstraction extension allowing you to transparently use any database
supported by that extension. Additionally PHP supports ODBC, the Open Database Connection
standard, so you can connect to any other database supporting this world standard.

PHP also has support for talking to other services using protocols such as LDAP, IMAP, SNMP, NNTP, POP3, HTTP, COM
(on Windows) and countless others. You can also open raw network sockets and interact using any other protocol. PHP
has support for the WDDX complex data exchange between virtually all Web programming languages. Talking about
interconnection, PHP has support for instantiation of Java objects and using them transparently as PHP objects. You can
also use our CORBA extension to access remote objects.

PHP has extremely useful text processing features, from the POSIX Extended or Perl regular expressions to parsing XML
documents. For parsing and accessing XML documents, PHP 4 supports the SAX and DOM standards, and you can also
use the XSLT extension to transform XML documents. PHP 5 standardizes all the XML extensions on the solid base of
libxml2 and extends the feature set adding SimpleXML and XMLReader support.

While using PHP in the e-commerce field, you'll find the Cybercash payment, CyberMUT, VeriSign Payflow Pro and MCVE
functions useful for your online payment programs.

At last but not least, we have many other interesting extensions, the mnoGoSearch search engine functions, the IRC
Gateway functions, many compression utilities (gzip, bz2), calendar conversion, translation...

Reference: Php.com