Generally, it's best to put config files into version control if they store significant information.
If you're talking ASP.NET sites here, I'd definitely place the config file in SVN. You can play a few tricks in ASP.NET config files using inheritInChildApplications and allowOverride (see How to: Lock ASP.NET Configuration Settings) which may allow you to force a local debug version to use different settings from the final production version despite using the same config file: just mount the website as a sub-directory in the local debug IIS and lock a few sections you wish to override. And of course, you could just include two config keys for particularly tricky bits and check in code which to load.
In general, it's good practice to make deploying anything from SVN a process involving as few manual steps as possible. That makes it more likely you'll do it correctly under time-pressure, and it makes disaster recovery easier to boot (say, when your datacenter springs a leak and you want to install the web site on some temporary box until you've got those backups sorted). Ideally, an svn checkout or export with at most a compile should suffice to get the web site up and running. I include even binary dll-dependencies directly in svn (stuff like javascript compressors and whatnot) so it'll run without requiring a bunch of custom library installs on the server, and compile on a dev machine with just msbuild.
For PHP, the principle is the same. However, you'll need different tricks. For instance, you might write the config file such that it checks some global system environment variable, and then overrides selected settings if it's a dev-machine. For instance, I've a setup similar to this where I check the IP address; all dev-machines are in a particular IP-block; unless a machine is in that IP block, it's considered a production machine (which doesn't enable various tracing etc. options). You could also check the host name, or simply any old environment variable which all developers agree to set on their development machines.
