The bug does not just affect interactive sessions but normal CLI operations as well.  Try put the following code in a file:

<?php

for($i = 0; ; ++$i) {
	echo $i."\n";
	sleep(1);
}

?>

Then run it at the command prompt:

c:\>php loop.php

After running for about 60 seconds, the following error occurs:

Fatal error: Maximum execution time of 60 seconds exceeded in C:\temp\loop.php on line 6

Sorry the command in my previous comment should be this:
 
C:\temp>php loop.php

Thank you for taking the time to write to us, but this is not
a bug. Please double-check the documentation available at
http://www.php.net/manual/ and the instructions on how to report
a bug at http://bugs.php.net/how-to-report.php

To chang execution time limit either use set_time_limit() 
function or run CLI php with -d max_execution_time=0 flag

F:\Temp\CVSProjects\ezcomponents\trunk>php -d max_execution_time=0 -a
Interactive mode enabled

<?php
sleep(4);
echo $a;'

Fatal error: Maximum execution time of 30 seconds exceeded in F:\Temp\CVSProjects\ezcomponents\trunk\- on line 3

It IS a bug.  I've double-checked the documentation:

http://www.php.net/manual/en/features.commandline.php

It says the default value of max_execution_time is 0 for the CLI version.

What's defined for max_execution_time in your php.ini

It's 30 seconds in my php.ini, but the error I get is this:

"Fatal error: Maximum execution time of 60 seconds exceeded"

Anyway, I thought the documentation is quite clear about the fact max_execution_time is one of the overridden php.ini directives for the CLI executable and that the default value is 0 (infinite).

it's a bug. I run php 5.1.4 over Windows XP, i have max_execution_time = 240 in my php.ini, set_time_limit(0) in my php script and i get "Maximum execution time of 60 seconds exceeded".

No feedback was provided for this bug for over a week, so it is
being suspended automatically. If you are able to provide the
information that was originally requested, please do so and change
the status of the bug back to "Open".

Please try using this CVS snapshot:

  http://snaps.php.net/php5.2-latest.tar.gz
 
For Windows:
 
  http://snaps.php.net/win32/php5.2-win32-latest.zip

Latest snaps do seem fixed.