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I've written an article on how to set up PHP for use in the Expression Development Server for an upcoming Expression Newsletter.
While I was working out what I believe to be the easiest way to get this done I decided to shoot a screen video. Hopefully this will be of assistance to people.
Update:
I just read a post on the Microsoft Expression Web Forum and wondered if the little step of marking the PHP folder as "writable" from within Windows Explorer would have side-stepped the user's issue.
Right click HERE and then click "Save Target As" to save the video to your local machine if you need a bigger view that the one below.