Peter just wrote a post about SEO for PHP pages on the SEO.com blog. Indexability of dynamic pages of all varieties (including PHP) is often misunderstood. I think a lot of it comes from changes that have occured over the years in terms of Google's ability (or rather willingness) to index dynamic pages, and it also comes from uninformed SEOs spreading outdating information or even outright rumors as though they were facts.
For all you SEO geeks, Peter's post offers a good intro to the topic of the CURRENT situtation regarding dynamic pages--not how it was 5 years ago. Remember, this is the first in a series of articles about the topic--so stay tuned to our SEO Blog to learn more.