I have just installed the lamp-server package on a new ubuntu 12.10 installation. It went fine.
I tested on localhost/ and got the expected response.
The I created an index.php file
Loading localhost/index.php works fine but loading localhost/ does not. Here a download of a ~ file is started.
I tried creating a .htaccess file contain only this line in the /var/www: DirectoryIndex index.php index.html index.cgi