can the web dev command the server to process older PHP files, say v.4, as PHP4? In short: is PHP backwards compatible if the file extension 'asks' for an older PHP processing?
Provided that both versions of PHP are installed on the server and filters/processing modules are configured so the commands are passed to the appropriate 'handler' certainly. You cannot mix versions of code in the same file in the same way that ASP and ASP.NET code cannot be mixed in the same file (.asp vs .aspx).
If you are going to mix PHP3 and PHP5 script code it has to be in seperate files.