line that was truncated on exapmle source is 
if (!fp = stream_sockect_client("tls://host:port",$errno,$errstr,30,STREAM_CLIENT_CONNECT/*|STREAM_CLIENT_ASYNC_CONNECT*/,$fc)) {

Please try using this CVS snapshot:

  http://snaps.php.net/php5-latest.tar.gz
 
For Windows:
 
  http://snaps.php.net/win32/php5-win32-latest.zip

stream_socket_enable_crypto() was added in PHP 5.1-dev,
it's not (and will not be) in PHP 5.0.x

installed php5-latest.tar.gz
am now getting the same error from server

but error from client is the same SSL error with added warnings
Warning: stream_socket_client(): SSL operation failed with code 1. OpenSSL Error messages:
error:14094410:SSL routines:SSL3_READ_BYTES:sslv3 alert handshake failure in ssl.conector.php on line 17

Warning: stream_socket_client(): Failed to enable crypto in ssl.conector.php on line 17

Warning: stream_socket_client(): unable to connect to tls://host:port (Unknown error) in ssl.conector.php on line 17
 (0)<br />


still no certificate passed


stream_socket_enable_crypto makes no difference

am also able to connect with c code
#include <iostream>
#include <string>

#include <unistd.h>
#include <sys/socket.h>
#include <netinet/in.h>
#include <arpa/inet.h>

#include <openssl/ssl.h>
#include <openssl/err.h>

#include <openssl/x509.h>
#include <openssl/pem.h>
#include <openssl/rsa.h>

static int password_callback(char* buf, int num, int verify, void* data) {
   strncpy(buf, (char*)(data),num);
   buf[num -1] = '\0';
   return (strlen(buf));
}

int main() {
   char *certfile = "sec.pem";

   SSL_METHOD* meth;
   SSL_CTX* ctx;

   SSL_library_init();
   SSL_load_error_strings();

   meth=TLSv1_method();
   ctx=SSL_CTX_new(meth);

   SSL_CTX_set_verify(ctx, SSL_VERIFY_NONE, NULL);
   SSL_CTX_set_cipher_list(ctx, "DEFAULT");

   if (SSL_CTX_use_certificate_chain_file(ctx,certfile) != 1)
     perror("error loading cert");

   if (SSL_CTX_use_PrivateKey_file(ctx, certfile,SSL_FILETYPE_PEM) != 1)
     perror("error loading key");

   SSL_CTX_set_default_passwd_cb_userdata(ctx, (void*)"qwerty");
   SSL_CTX_set_default_passwd_cb(ctx, password_callback);

   SSL* ssl = SSL_new(ctx);

   int sd = socket(AF_INET, SOCK_STREAM, 0);
   struct sockaddr_in sa;
   memset(&sa, '\0', sizeof(sa));
   sa.sin_family      = AF_INET;
   sa.sin_addr.s_addr = inet_addr("206.127.2.49");
   sa.sin_port        = htons(1234);
   connect(sd, (struct sockaddr*) &sa, sizeof(sa));
   getpeername(sd,(struct sockaddr*) &sa,(socklen_t*)(sizeof(sa)));

   SSL_set_fd(ssl, sd);

   SSL_set_connect_state(ssl);

   int state = SSL_do_handshake(ssl);
   if (state!=1) {
      SSL_get_error(ssl,state);
      ERR_print_errors_fp(stderr);
      return 0;
   }
   sleep(15);
   return 1;
}

which if I'm right in assuming SSL *php_SSL_new_from_context(SSL_CTX *ctx, php_stream *stream TSRMLS_DC) in /ext/openssl/openssl.c is the context creator should be logically the same thing.

actually I looked at the methods and if I take out the SSL_set_connect_state() and switch the method to TSLv1_client_method() I get the errors out of C... so it looks like it's in my openssl libraries...
I'm running 0.9.7g, which is the latest stable... I'll try the snapshot and see if that helps... I'll let you know if it does but after that, if it doesn't, I'll probably bug openSSL about it cause it seems to be their deal...

I will say my workaround(which I had previously thought was just different syntax) worked for me in C... but I can see where you would want to keep all CTX settings in php_SSL_new_from_context and not put them in php_openssl_setup_crypto where you set up the methods... it's alot cleaner that way

crap... ignore that... forgot to change SSL_do_handshake() to SSL_connect() when took out SSL_set_connect_state()... so I can connect using what seems to be the same connection method in C.

so I added php_error_docref displays to the certfile and passphrase GET_VER_OPT sections of php_SSL_new_from_context and recieved no display from either.

It seems that the variables aren't getting parsed, but truthfuly, I'm hacking with very broad swings on that one... and, I haven't at all looked at the inner workings of the GET_VER_OPT macro.

Looks to me like you want to be using sslv3:// instead of tls:// there (just based on your server output).
Use ssl:// for automatic v2 or v3 support.  Only use tls:// when the server can only speak tls; it's a different dialect of SSL.

The context options for openssl, including tls, are all bundled under the name "ssl".

I think your code should probably look more like this:

$c = stream_context_create(array(
   "ssl" => array(
       "local_cert" => "sec.pem",
       ... other options ...
   )
);
$s = stream_socket_client("sslv3://.....", ....., $c);

my testing server is 
openssl s_server -accept port -cert sec.pem -Verify 1

and my actual server was first set up to accept only tls, I changed it during testing to accept all three hoping that the problem was me being too strict

I have tried tls:// ssl:// and sslv3:// -- they all return the same error 

sslv2: returns no actual SSL error on the client, just the warnings about failed to enable crypto and unable to connect
and returns 
12058:error:140710CA:SSL routines:REQUEST_CERTIFICATE:peer error no certificate:s2_pkt.c:675:
from the server -- same error but for the sslv2 functions

I tried adding -tls1 to the end of my openssl s_server but that didn't make any difference in what happened.

I'm actually pretty sure that tls uses the sslv3 handshake functions.

%$#*@ so I didn't listen to you about the context settings.... that was it... I was trying to use the transport name and not ssl... it works that way for all of them... I must have forgot to change it for m tls when I tested ssl://

that was it usage error thanks though.