You have also the option of compiling from the sources rather than relying on the OS-provided packages.
Another advantage of compiling from the sources is enabling exactly the options that you need, with a software such as PHP with so many options the packager may not necessarily activate what you want.
That is not a bug, it is a feature... CentOS tracks Red Hat Enterprise Linux - since RHEL 5 doesn't have a newer PHP, CentOS 5 won't either.
However there are lots of RPM sources that will get you newer PHP etc. if you don't care about exactly-RHEL compatibility. E.g., the DAG rpm repository: http://dag.wieers.com/rpm/FAQ.php#A1
I wonder how many people here would actually benefit from running CentOS. The first thing I need to do on a new CentOS machine is install newer versions of PHP, Python, and Ruby. It's kind of becoming a pain in the ass.
I use CentOS and I like it because I get both the underlying structure and packages of RHEL but it doesn't get in your way (as Ubuntu or Debian try to) when you want to step off the beaten track and do things by hand. In Debian-based distros, not using the package manager feels like heresy.
On the other hand, with CentOS you have to step off the beaten track and do things by hand more frequently - for example, where CentOS comes with Exactly One Python Version, and everything Python-related is packaged against it, Debian comes with multiple Python versions, and anything Python-related you install automatically gets set up to work with whatever (compatible) Python versions you have installed.
I think the primary reason for its existence is complete binary compatibility. I think they may even say that on their website. If you don't need the compatibility, there are probably better options.
It's a shame PHP is still 5.1 without using the CentOS-Testing repository.