SteveWh - 5:33 pm on Feb 29, 2012 (gmt 0)
My understanding is that penders's description of what the two directives are supposed to do (and what they're for) is exactly right, but in some Apache versions it is necessary to use a workaround to achieve the desired effect on the server, which leads to the many variations of the two lines that you find. Some configurations require AddType, others AddHandler, and others require both. And the precise syntax required for each line also varies with version/configuration.
First look for a FAQ or KB page at your host with explicit instructions for their servers (usually titled something like "parse html files as php").
If none found, search online for forum posts by other users of your webhost describing what worked for them.
If none found, use random examples you find online and experiment until one works.