PHP execution in .html files

.htaccess files are quite limited, by default, as there are potential security issues opened up by broader override options. You can set AllowOverride to permit FileInfo and Options (or just “all”, since those are the potentially dangerous ones anyway…might as well go whole hog), and restart Apache, and it’ll respect those directives.

Or, probably safer, something like this in the httpd.conf should also do the trick:

AddHandler fcgid-script .html
AddHandler fcgid-script .htm
FCGIWrapper /home/domain/fcgi-bin/php5.fcgi .html
FCGIWrapper /home/domain/fcgi-bin/php5.fcgi .htm

Find the bit where the existing fcgid-script rules are and add them there…and, obviously, replace the "domain" bit with the actual directory where this virtual server lives.