Andrew Nacin, one of the core developers of WordPress, has a recent post to his blog about the current state of PHP and how that relates to WordPress' backwards compatibility support of PHP4.

I’ve been meaning to write this post nearly a month now, on the heels of WordPress 3.0′s release and preparing for an inevitable future discussion of when we should drop PHP 4 support. And then current events give you the hook you need to sit down and do it.

He talks about WordPress 3.0, the support of PHP Earthlink offered, how their PHP4 usage stands currently, efforts they've done to get people to make the move up from PHP4 versions, PHP5 market penetration and more.