Okay, so installed xamp on my ubuntu machine, started it up and everything worked. Apache ran my php app just fine (including requests to the root url "/"). However, after the first reboot since installing, when I request "http://localhost/" apache serves up the index php page as a phtml source file. All other urls (like "http://localhost/login") work as expected.
Backgound: The only modification I made to xamp was to setup a vhost for my app. The app uses an .htaccess file where I define some rewrite rules (the app is an MVC framework and all urls are rewritten to a single entry point php file). I'm using Xamp because I need php >= 5.3.0.
I know apache will serve up the source of a php file when it doesn't know to process php files. But the config does indeed have "AddType application/x-httpd-php .php" and as I said, the app works for all urls except the root "/" (and only since I've rebooted). The .htaccess file does contain a DirectoryIndex directive.
xamp 1.3.7a Ubuntu 9.10