Just a side note that on the newer (and soon to be deprecated) Apache builds where you have the option to select php4 or php5 you will want to modify the above suggestion to this:

AddHandler application/x-httpd-php5 .html .htm .php

or

AddHandler application/x-httpd-php4 .html .htm .php

Depending on the version of php that you are running. You can configure this in your cPanel > PHP Configuration.

Remember PHP4 will soon be dead so we recommend selecting PHP5.