I use PWS on a Win 95; to be able to run php files here, I have to specify that the virtual directory in my machine can, not only read and run scripts, but also *execute* (Advanced | Edit properties | checkbox "execute"). Also, I have to type the http address, not the filename: http://myserver/dir/file.php. C://dir/file.php won't work...
Since both of my OS and Web Manager are different from yours, I don't know if any of this can actually help ... sweetju