PHP version 5 I look at as when PHP became a real language, for a whole bunch of reasons, but most importantly because it became possible to write respectable Object Oriented code.
But don't deemphasize the difference between MySQL 4 and 5 - I think it's even deeper and more significant. MySQl 5 was when MySQL became a real relational database platform, for a whole bunch of reasons, but most importantly because it became possible to write fully expressive SQL statements (starting with full subquery support).
Just those two limitations on the earlier versions are, I hope, showstoppers for you. There's no reasonable excuse for accepting less than version 5 of either.