I can't reproduce this for stream_set_blocking -- it works as expected:

<?php
$proc = popen("tail -f /var/log/syslog &", "r");
if (!stream_set_blocking($proc, 0))
	print "stream_set_blocking has failed\n";
else
	print "stream_set_blocking successful\n";

$readfds = array($proc);
$writefds = $exceptfds = array();
/* in non-blocking mode, if we don't wait for data with this select,
   the fread will return nothing and the process will close before
   tail can write the data, resulting in "tail: write error: Broken pipe"
   This is expected and shows the non-blocking mode is working */
if (stream_select($readfds, $writefds, $exceptfds, 1))
	echo fread($proc, 8192);

If it still doesn't work for you, please add more information (e.g. an actual script we can run).

For stream_set_timeout, it's true it doesn't work, the read timeout is implemented only for sockets (and user space wrappers). Implementing this for the plain wrapper is risky and the return is small because it can be accomplished in userspace by using non-blocking mode and stream_select. It would imply changing the stream to non-blocking upon each read operation and enforcing the timeout ourselves, like we do for sockets. This makes things less efficient and adds complexity to the code, which leads to bugs (e.g. there was a busy waiting bug in ssl code until the last release), not to mention it would imply completely different code for windows. I'm reclassifying it as a feature request, but don't hold your breath.

Thanks for your fast reply! 

You are right: set_blocking_mode works under Linux. I don't know what I made wrong to find my test-cases not working, so sorry for that!

With set_blocking_mode, I was able implement what I need without using stream_set_timeout, so I guess a feature request is not necessary (at least for my cases).

Perhaps the documentation for stream_set_timeout should be changed to be more specific? It says "As of PHP 4.3, this function can (potentially) work on any kind of stream.", but it should say that the read timeout is implemented only for sockets and that it doesn't work on Windows at all.