Hi!
I've been looking all over Google and the Apache manual, all to no avail.
Basically, I don't want the Apache server to run all settings as a single user. Linux is a multi-user environment, after-all.
It wouldn't be a problem to set up, but the server runs PHP. Thus a user could just write a PHP script to fopen() and read other user's files in their webspace, including config.php

I've been tampering with httpd.conf for a few days trying to make each have their own vhost, derived from their shell username, but instead it insists on taking on just one, etc.
I've tried multiple NameVirtualHost's with User and Group below, etc.

Have any webhosts managed to set this up properly without cpanel, whm, and webmin, etc? I'm considering just reading an httpd.conf of a random webhost or something.

The way I do this is to run PHP as a CGI binary (instead of as an Apache module) and then use the SuExecUserGroup directive within the vhost configuration (this will apply to all CGI scripts). You'll need to have suexec support built into Apache for this to work. There's also a phpSuExec project that can be used to set this up (also works as a CGI IIRC).

Hope this helps.