The SetHandler directive basically overrides PHP's use of AddHandler. The only "handler" mod_perl will return you back to is "default-handler" - i.e. deliver the file as-is.

A work around is to either use AddHandler perl-script .pl (or whatever extension you choose), or put all your PHP scripts elsewhere, or use <Files> to map your mod_perl bits, or use a PerlTypeHandler, as documented in the book (see the beginning of Chapter 4, or Chapter 8's "Reimplementing mod_mime..." section), to automatically re-map to PHP.

Hope that helps.