Update: Changed Mobile Web Server to Raccoon from Mobile Web Server in the title. Raccoon is the port of Apache, Mobile Web Server is the overall service that includes the gateway components that gives a Raccoon instance a static web address.
On the web a popular combination of technologies for creating dynamic websites (including All About Symbian itself) is LAMP (Linux, Apache, MySQL, PHP). Linux is the operating system, Apache is the web server, MySQL is the database and PHP is the scripting language. PHP is used to create a web page (PHP can be embedded in HTML) with data generally coming from the MySQL database. Nokia are porting this combination to create PAMP (Personal, Apache, MySQL and PHP).
Nokia's Mobile Web Server already supports Python as a scripting language, but PHP is more widely used so should encourage more developers to experiment.
Nokia's Mobile Web Server and the its forthcoming PHP addition should be considered experimental or conceptual software. It is not something we can expect to see installed out of the box in the next year. However it does have a lot of potential as we discussed in this earlier article.
PHP is a very powerful scripting language and can be used to create complex web applications. PAMP would enable you to run these application locally on your phone. The forum post describing PAMP mentions that Druapl, a popular content management system, can be use used off the shelf. You could also run an RSS aggregator, a task manager or any number of other such applications. PHP makes it easier to use existing applications, but also simplifies the creation of new ones.
The web as a platform for applications (e.g. GMail) is a trend that has emerged in the last few years. One possible future sees the vast majority of mainstream applications run via a web browser. A key advantage would be the the ability to access such applications from anywhere including a mobile phone. The web can also be used to create stand alone applications for mobile devices. This is the approach that Apple has espoused with its iPhone (currently the only 'applications' you can add are web sites. Nokia is following a similar trend with its Web Runtime technology and Web Kit based S60 Browser.
However a purely browser based solution does have some problems. What happens if there is no connectivity? Applications become unusable and data stored on the web becomes inaccessible. With mobile devices this first issue becomes relatively common place and resource constraints become more apparent - bandwidth maybe more limited and Internet data connections are power hungry. The answer to this may be a hybrid approach (combining online and offline). A fully functioning web server on your phone is one way that makes it easier to implement an offline solution for both application usage and data storage.
Moreover the extensions to PHP mean some of the core functaionlity of the device would be accessible. This would allow for closer integration between web applications and the hardware on the phone (e.g. imagine an image gallery that has a take picture link that uses the phone's camera to take a picture and automatically adds it a gallery). You can also turn this round in its head. Instead of merely using the web server locally you could also access it from another device. For example you could use your PC to access a browser based application running on the web server on your phone. This is exactly what Nokia has done with its current Mobile Web Server implementation (access to Contacts, SMS and so on).
PHP does not add anything dramatically new to this, but it does make it more accessible thanks to the large pool of existing PHP developers.