Some XP machines are having troubles with the PHPIniDir derective not finding the php.ini (or so they think). Directories that do contain a php.ini file are returned as empty and it defaults to the next method of finding php.ini (often C:/windows or C:/winnt).
This is likely caused by read permissions not being set correctly on NTFS file systems, however, it has occurred when no cause could be identified. If setting correct file permissions doesn't work, the easiest way around this problem is moving php.ini to the Apache directory or adding the HKEY_LOCAL_MACHINE\SOFTWARE\PHP\IniFilePath string to your registry and setting it to the correct directory.