PHP is a Server side scripting language. Its primary competitors are ASP (Microsoft), JSP (Sun), CFM (Adobe), and Perl (often called cgi by hosting companies, although it is not the only cgi language).
PHP was originally created in 1995, so as a technology it is fairly mature. Version 5.x is the latest stable version and 6 is under development. It is currently running almost 20 million websites including big names like Facebook.
The most common server architecture on which PHP is found is called LAMP (for Linux + Apache + MySQL + PHP). All of the elements of LAMP are open source, meaning that the source code of the application is freely available. This means that the cost of setting up a server running LAMP is reduced (No License Fees), so LAMP based web hosting tends to be the least expensive solution available.
The Internet is built on a client-server architecture. On the client side we have the user and the browser. One the server side we have the server and its script interpreter (In our case, Apache and PHP).
Because PHP runs on the server side, we cannot use it for flashy client side effects, things like animations and auto-complete cannot be performed by php because php is only running on the server. For client side programming we could use javascript, Flash/Flex, Silverlight, or JavaFX.

