It works fine when your ini file is actually loaded.
Check phpinfo() for "Loaded Configuration file" line..

Of course it is loaded: I already use phpinfo() script
Loaded Configuration File 	/usr/local/etc/php.ini

I even tried:
display_errors = stderr
display_errors = Stderr
display_errors = "stderr"
display_errors = "Stderr"

All behaves as:
display_errors = On

This bug is NOT bogus.

I can confirm it for PHP 5.3.2 on IIS 7.5 running on Windows Server 2008 R2 (I'm using the precompiled binaries from windows.php.net)

display_errors=stderr is ignored, output goes to STDOUT, if log_errors=On and error_log is set to a file.

And yes: I checked that the correct php.ini file is loaded.

(On a side note: I don't think that bug #28349 is bogus either. If I set display_errors=Off I excpect it to mean "Off" and not "Well, mostly off, unless you set some other configuration options to wrong values.")

I second the motion that display_errors=Off means off, completely off under all 
circumstances and regardless of reporting level. FWIW, I have the following in 
httpd.conf and I'm still seeing errors on the screen (PHP 5.3.1):


php_value display_errors Off
php_flag log_errors 1
php_value error_log /tmp/php_errors.log
php_value error_reporting 2147483647

The value for error_reporting comes from the online documentation.

The bottom line is I want to see ALL errors logged to a file, but none NONE on 
the 
screen.

Maybe I've misunderstood something but it seems that I have my settings correct.

Sorry for that last post, I just realized that the "type" change in display_errors 
happened AFTER the version of PHP that I'm running.

However, the suggestion to set error_reporting to 2147483647 (when setting it 
inside httpd.conf) causes display_errors to fail (to display all errors regardless 
of its actual setting).

http://www.php.net/manual/en/errorfunc.configuration.php#ini.error-reporting

Wish it wasn't so, but alas, it is :-(

I can confirm that this is still an issue.  I have the following setting:

display_errors = stderr

According to the php.ini documentation for this setting:

;   Off = Do not display any errors
;   stderr = Display errors to STDERR (affects only CGI/CLI binaries!)
;   On or stdout = Display errors to STDOUT

However, warnings are being dumped to the browser.  I have also checked that the setting is correct in the .ini file reported in use by phpinfo(), and that no scripts are overriding this with ini_set().