Maybe I'm missing something here but I can't get the the concept!!!

I've worked through Welcome 1 to Welcome 3 creating a welcome3.html file and a welcome3.php file. When I open html it shows on webpage, I can enter a name and click go but that's it. If I try to open the .php file it opens in dreamweaver.

I have saved the html and the php file in a directory called c:\inetpub\wwwroot\

I think it might be something to do with browsing servers on the host or my own machine cos I'm a bit lost here too.

I'm a bit new to all this.