On my work machine, I do PHP development under XAMPP, which includes Apache and MySQL. I'd like to start developing and testing some Rails code on the same machine - also using MySQL (and I assume it also needs Apache).
What's the easiest way to do this without conflicts?
You don't need to use Apache for Rails development (although you can). It'll be easier to install the mongrel web server and use the included ./script/server script to run your code. It's quicker to setup and use for development.
If you want to use Apache check out Phusion Passenger (http://www.modrails.com/) which is an Apache module that can run Rails code under Apache.
You can use your existing MySQL server for your Rails database or try out SQLite which is also quite convenient for development.
If you're just using the box to develop and test Rails code, just run Rails on a different port than Apache/PHP. Rails has a built in web server that's fine for testing on, so I wouldn't worry too much about conflicting.