PHP will work with almost any database. I always work with Oracle, so I don't know about the performance with other DBs. I had an experience with SQL Server 2005 + ASP, and also Oracle + ASP, and I did notice a big performance difference. Oracle is much faster. Still, I think you should do fine with PHP + MySQL.
Program with whatever you are comfortable with. You will find the nuances easier to deal with that way. As for databases, again it comes down to preference. As much as I would LOVE to get into Oracle I find myself working with MySQL a lot, and never have a problem with speed (so long as you know your SQL )