Nope! Joomla! works fine with PHP5.
You might want to understand, however, that Joomla! will also "complain" about one of the settings in DH's PHP5. The issue there is "magic_quotes",
None of this is really as relevant as the Joomla! developers (understandably, given the programming abilities of many/most Joomla! users) might have you believe; they have taken the route of being very pro-active regarding security and now choose to issue warnings if there is even the remotest possibility of an exploitable "hole" in a poorly coded component.
The "core" Joomla! is very robust, and neither the register_globals or magic_quotes issue is a real issue with that code - the problem is in the plethora of add-ons and components available and their greatly differing quality and attention to secure coding.
To me, the "register_globals" being on is the greater problem. My tests have shown that:
1) Using PHP4, you will get warned about register_globals, but magic_quotes is set as recommended.
2) Using PHP5, you will not have the register_globals warning, but you will be warned about magic_quotes.
The only way I have found to eliminate all warnings on DH, is to use a customized php.ini or custom php installation.
That said, when you originally asked about the "idiot's guide", I was not sure if you had seen the DH wiki article on customizing php.ini and thought it was too complicated, or if you are not aware of its existence.
If you carefully follow the instructions, it is really not that hard to do - but if the steps involved are totally foreign to you, you are probably well advised to forgo attempting it until you feel reasonably comfortable working in the shell.