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mattur - 11:00 am on Jul 4, 2006 (gmt 0)
PHP runs on the server to generate the html code, and you have complete control of the html in exactly the same way as when you write a static html page in your editor. The only potential problem I can think of is where php is set to append a sessionid onto the end of your urls. If you're not doing this, spiders/search engines will have no problems indexing your php pages.
Do a view source from your browser on one of your php pages. That is what the spiders see. It's a html web page, exactly like any other web page, so can be optimised exactly like a static html page.