Wow that's an utter ridiculous way of doing things. This pretty much prevents any software to run as PHP5. I'd strongly urge your host to REVERSE this, making .php run php5 and .php4 run php4 for those who still haven't been able to upgrade their software after over 3 years.
You may still be able to change this for your home directory only with a .htaccess file pointing .php files to the right destination. You could try to ask them for that!
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If you want something from me please DON'T PM me on this forum as the inbox keeps filling up. Send me email instead at marco at i-marco.nl. Thanks!