That is very strange, it sounds as if the file type isn't registered in apache to route to the php engine. Since the codetester is working, php is obviously registered in apache.
Are you sure the extension of the file is .php, Notepad has a tendancy to add a .txt to any files it saves. test.php would become test.php.txt if saved in notepad without changing the extension dropdown to be "All files" when saving.
Save this as test.php in your www directory:
<html>
<head>
<title>Test page</title>
</head>
<body>
<span>--|</span><span><?php echo 'php is working'; ?></span><span>|==</span>
</body>
</html>
Make sure there isn't an index page in the www directory so you'll be able to see the directory listing in the following step.
Navigate to 127.0.0.1, you should see all the files and folders in the www directory, click on test.php - what do you see?