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Some of the key features of PHP 5 include:
The Zend Engine II with a new object model and dozens of new features.
XML support has been completely redone in PHP 5, all extensions are now focused around the excellent libxml2 library (http://www.xmlsoft.org/).
A new SimpleXML extension for easily accessing and manipulating XML as PHP objects. It can also interface with the DOM extension and vice-versa.
A brand new built-in SOAP extension for interoperability with Web Services.
A new MySQL extension named MySQLi for developers using MySQL 4.1 and later. This new extension includes an object-oriented interface in addition to a traditional interface; as well as support for many of MySQLs new features, such as prepared statements.
SQLite has been bundled with PHP. For more information on SQLite, please visit their website.
Streams have been greatly improved, including the ability to access low-level socket operations on streams.