In PHP 5 there is a new Object Model. PHP's handling of objects has been completely rewritten, allowing for better performance and more features. In previous versions of PHP, objects were handled like primitive types (for instance integers and strings). The drawback of this method was that semantically the whole object was copied when a variable was assigned, or passed as a parameter to a method. In the new approach, objects are referenced by handle, and not by value (one can think of a handle as an object's identifier).
Many PHP programmers aren't even aware of the copying quirks of the old object model and, therefore, the majority of PHP applications will work out of the box, or with very few modifications.
The new Object Model is documented at the Language Reference.
See also the zend.ze1_compatibility_mode directive for compatability with PHP 4.