This is a bit hard to understand for the normal user........
Hence we don't encourage you to go messing with your server unless you are experienced and really know what you are doing. The simplicity of SME is actually also its Achilles Heel as it stops users from having to think, and learn.
This *is* fairly complicated, and perhaps we should reflect that on the Wiki page.
Trying to install ANYTHING beyond the basic install will always carry a risk and you can easily get yourself in a bit of a mess which then can trash your server and/or leave you open to the world + dog.
I presume you want the PHP update to install some form of web app. Be very careful......
Rgds
John