allow_url_fopen is security prone, people were improperly including files allowing attacks to include their own remote files which caused a world of problems.
I'd suggest if you are compiling PHP, do PHP5 in any reguards. Here's the wiki page: http://wiki.dreamhost.com/index.php/Installing_PHP5
PHP5 is the prefered way to go and when you do this, use the recommeded .ini file, just be sure to turn on register_argc_argv if you want to use Pear. Everything else, by default, is fine.
Just hope none of your scripts require register_globals. That's my pain of PHP features. I hate it. I dispise it. I yell at anybody that "requries" it. lol
PS: oh yeah and that script they suggest, hum .. edit it. DO NOT under ANY circumstances compile anything into $HOME/$DOMAIN/php. REMOVE $DOMAIN !!!!
(I really should go and remove that myself. Nobody's made any comments to that in my "discussion" post on it.)