Could you please post the exact error you see in your browser when you try to rename "index.html" to "index.php"?
You should not be getting an error if you have PHP and HTML in the same PHP file; I do it all the time as I would rather break from a <?php ... ?> section than stay in it and use a whole whack of "echo()"s.
Example:
Code:
<html>
<title>Page title</title>
<head> Something...</head>
<body>
<?php
for ($i = 0; $i < 100; ++$i) { echo("$i "); }
?>
</body>
</html>
It could be your HTTP server isn't configured properly. When there are nice tools available, I will use
Apache, otherwise it is
lighttpd all the way; it is
much easier to get up and running, and tweak.
EDIT: Okay, when I tested your index.html file (as index.php) it didn't run, but I didn't get an error. I finally got it to work when I removed the "<?xml ... ?>" section.