penders - 1:18 pm on Feb 28, 2012 (gmt 0)

As I understand it AddType tells the browser what mime-type the specified file extensions should be - in other words telling the browser how to handle the file. AddHandler, on the other hand, tells the server how to process files with the specified file extensions. They do different things.

In your case (with AddHandler) you are telling the server to send all .html files through the PHP engine.

AddType x-httpd-php .html

This looks wrong to me, I don't believe "x-httpd-php" is a valid mime-type and this probably explains your Windows error message. If anything (IMHO) it should be "application/x-httpd-php"...
AddType application/x-httpd-php .html

However (and this is where my server knowledge is flagging - so if someone else can please explain), despite seeing examples of this all over the web, I don't know why AddType would be required in this way. AFAIK the default mime-type for .html files is text/html which I would have thought would be OK?