It was something basic. Apache2 in etch doesn’t enable Action directives by default.
You can use the debian package php5-cgi (in your own dev environment).
Debain basic config:
apt-get install apache2 php5-cgi php5-cli
add any other parts you need, like php5-mysql php5-gd …
if you don’t have the actions module enabled, then Apache barfs when you put it in your .htaccess file. Go figure.
AddHandler phpfive .php
Action phpfive /cgi-bin/php5
my previous 500 errors were because the module Actions was not ebabled. The debian tweak to the apache config is good and bad. I like the organization, but it makes debugging trickier.