In an effort to try to help others out there with the same issue, Felix Geisendorfer has posted this new entry after solving an issue he was having with Windows XP, Apache, and PHP - specifically an output problem when using the functions like fread/fpassthrough/readfile/etc resulting in incomplete output.
I'm doing this post because I hope that Google will index it, and the next person hitting the issue will find my blog this way, so he doesn't have to go through the same issues that had to deal with.
He gives some of the "official" symptoms that he saw and the seven step simple process that he followed to correct the situation.