A new section has been introduced in the Control Panel, which allows you to easily manage the way your PHP-based applications are handled and run by the web server. You can choose whether PHP 4 or PHP 5 to use by default. PHP 5 is now officially supported on all servers.
There are several differences in the configuration and in the way certain functions and expressions are handled. PHP 4 has a larger installed base at this point, but since PHP is a server side script, it will hardly affect the end user. PHP 5 is simply a newer release, which offers its own improvements and add-ons. However, there might be some incompatibility issues when certain applications are run on both versions. You should use PHP 5 only if it is required by the script author.