well, yes, of course if you call a page w/o .php it's not going to send it to the php processor. that's what your mapping says after all.
the only other thing you might want for your config is to add index.php to your directoryfile line. but for the most part AOLServer is doing what you want, now you have to configure libphp correctly... for instance does /usr/share/php exist and does the user you are running aolserver as have permissions for it?
