The OS is windows Server 2003 with all the current available service packs and patches.

Had the same problem here on an identical set up.

I'm not 100% sure where the problem lies, however i've got it working after doing the following:

1) Uninstalled PHP, deleted c:\program files\php entirely, rebooted.
2) Reinstalled into c:\php rather than c:\program files\php
3) Added a PHPRC environment variable pointing to c:\PHP
4) Removed all the extns from the bottom of c:\php\php.ini, then rebooted.

This for me seemed to solve the problem.

I then added back all the extns i needed. A good tip was to run php.exe from the command line, as this throws up errors in php.ini in particular in regards to extns you're trying to load which have third party dll requirements which may be missing.

Not a solution i'm afraid, but it may shed a little light on the subject.

Clive

[quote](1) Uninstalled PHP, deleted c:\program files\php entirely, rebooted.
2) Reinstalled into c:\php rather than c:\program files\php
3) Added a PHPRC environment variable pointing to c:\PHP
4) Removed all the extns from the bottom of c:\php\php.ini, then
rebooted.
[/quote]
clive,
I had already done #1 and #2 repeately.  I checked on the PHPRC and path variables, and both were already there and correct.
I don't have any "extras" at the end of the php.ini that I know of.

When I run php.exe from the CMD window, it does nothing.  I hit CTRL C and the prompt comes back

This is so frustrating.  I'm sure its some blasted windows issue.

Ok, found the problem.  WIth the "new" version of PHP short scripting tags have been DISABLED!!!!!  That is <?  my code ?> are ignored.  Instead only the longer version are processed <?php  my code ?>

There is a php.ini variable that must be set to on.
 short_open_tag = on

This is complete BS, and this should by default be turned to on.

Not a bug > bogus.