@SyCoAug 22.2008 — #PHP is parsed (or executed) at run time by the webserver. PHP can parse HTML but HTML can't parse PHP. If it's an HTML template it's possible it was created in a PHP script.
HTML templates often use things like BBcode to parse the input (eg POST or file) and changed it eg ; ) to a wink emoticon image or something. PHP parsed the input, chaged the wink text into HTML calling on the image.
A file ending in .PHP would usually have PHP code in it but it doesn't have to but it could. A .htm file cannot execute php (well there is a few tricks with javascript but basically that's the way it is).
I hope that helps to clear it up and I've not confused the hell out of you ?