we've just been discussing it here:
http://workalone.co.uk/mailman/listinfo/wauk_workalone.co.uk and we've concluded:
Depends on:
1) The relative amount of PHP and HTML code in the source file.
2) Your own personal preferences.
3) General readability.
Don't use short tags, - they're not good (conflicts
with XML, not enabled on some servers, deprecated in PHP, etc.).
I wouldn't worry about processing time at all, unless you're outputting
several megabytes of HTML code into one page.
Keeping HTML relatively pure with the minimum scripting markup is good if
you have separate people doing the PHP and the HTML. Use a template system
like smarty if you want to limit what the HTML person can do, otherwise
PHP works as a very-powerful template language

Drupal uses PHP as its default template language, and does various
architectural things to separate code from presentation.
so my use of short tags should be avoided and
<title><?= PAGE_TITLE ?></title>
<script type="text/javascript" src="<?= DIR_JS ?>sack.js"></script>
<script type="text/javascript" src="<?= DIR_JS ?>update_cal.js"></script>
<link rel="stylesheet" href="<?=DIR_CSS?>basic.css" type="text/css" media="screen">
<link rel="stylesheet" href="<?=DIR_CSS?>calendar.css" type="text/css" media="screen">
should look like:
<title><?php echo PAGE_TITLE; ?></title>
<script type="text/javascript" src="<?php echo DIR_JS; ?>sack.js"></script>
<script type="text/javascript" src="<?php echo DIR_JS; ?>update_cal.js"></script>
<link rel="stylesheet" href="<?php echo DIR_CSS; ?>basic.css" type="text/css" media="screen">
<link rel="stylesheet" href="<?php echo DIR_CSS; ?>calendar.css" type="text/css" media="screen">
I think the ultimate rule of thumb is that if it's a little bit of html in a lot of php echo it, if it's a few bits of php in a lot of html drop in and out…
if someone else is messing with your html, like designers, then much easier for them to work with the html, they're used to and ignore anything inside <?php … ?>
sorry to spoil your day! maybe my donation (later when I get my act together) will help change that!