If you are getting the source file downloaded instead of the rendered output, php.ini hasn't come into play yet. As sybreon mentioned, you need to make sure first that you have the php module loaded. There should be a line like
LoadModule php5_module modules/libphp5.so in your httpd.conf, or an included config file.
Once the module is loaded, it still won't do anything until you define the MIME type with
AddType text/html .php and associate the php extension with the module with
AddHandler php5-script .php
Additionally you will probably want to add a DirectoryIndex for index.php files.
If you are installing php from a package (like rpms via yum on RedHat/Fedora) the configuration to make that happen will already be installed. If you have just installed a package and are not getting the expected result, you need to restart (or reload) apache for it to pick up the new config.