We have recently changed our PHP version used on the web site (hosted as you may know on 1&1 Internet), from the default 5.2.17 to PHP 5.4.4 which is the latest released version (14th June 2012).
We were waiting upon PHP version 5.3 but that is not available, despite PHP version 5.2 being long out of support since December 2010.
PHP version 5.3 is recommended for Joomla 2.5 and a number of extensions now recommend version 5.3.
Initial testing seems to indicate that things are still working correctly without any unwanted side effects. If you find any please le us know.
The change was easy and is documented here.
[We did notice a transient problem with using the editor to insert hyperlinks and editing an image to reposition it within this blog entry, but it seems to have resolved itself and may well have been a cache issue.]
Small rider to add here is that one has to remove the .htaccess directive when/if one reloads a backup of the site upon another host that does not recognise the AddHandler directive.