like magic

This php stuff is really hard to understand. It's working and all but I don't understand why - especially why I see all the code when I view source on my web page. I thought I was just supposed to see the php from the index page, but I seem to be getting it all, maybe the browser puts together all the pages and shows me everything at once? Spent about half an hour finding a template to use and about an hour doing the assignment 2.