WordPress: PHP Is Not Installed

So I'm starting to work on a little project at home involving a website built in WordPress. This is all new to me so naturally, there are going to be bumps in the road. Anyway, I managed to install Apache, MySQL, and PHP. However, when attempting to install WordPress, I was continually presented with the error:

Error: PHP is not running
WordPress requires that your web server is running PHP. Your server does not have PHP installed, or PHP is turned off.

WHAT??? The PHP test file worked perfectly fine! I googled and googled some more trying to find a solution to this and while there question appeared frequently, there was never a good answer. I finally figured it out myself though!

The problem was in how I was accessing install.php. Through Windows Explorer, I had navigated to my WordPress directory and double clicked on readme.html. The file opened in Firefox. Then I clicked the hyperlink in Step 2 "wp-admin/install.php". This opened the file with the error, and here's the problem: look at the address bar:

file:///C:/apache/htdocs/wordpress/wp-admin/install.php

In order to make it work, you need to hit it from LOCALHOST

http://localhost/wordpress/wp-admin/install.php

BAM! Done! 

Environmental Variables:
OS: Windows XP SP3
Webserver: Apache 2.2
MySQL: 5.5.21
PHP: 5.2.17
WordPress 3.3.1