Heh, didn't really try to sell you on it
You're welcome to use others I just like Azure. Anyways...
Its currently manual, which may or may not be a good thing depending on how you look at it. With manual there is no surprises in the bill. You only pay for what you want. But being manual you could miss traffic spikes. Thus reduce performance during those times.
- Does it operate in a CDN-like environment (the server itself, storage, and SQL parts in particular)?
It can operate in a CDN-like enviroment, they have 2 data centers in the US you can pick to deploy to, or both. Along with several others around the world. There is also a CDN add-on if you need it for files. Its not an automatic CDN. Again paying for what you need and nothing more.
- How well does IIS play with PHP (we've had some "fun" in the past with this...)?
IIS7 (using FastCGI) plays very well with PHP. Since version 5.3, the PHP Group made Windows a first-class citizen along with Linux/Unix systems. The very FastCGI module that IIS7 uses was made specifically with PHP in mind. (Its a product from the partnership of Microsoft and Zend they did a while back.) You shouldn't have any problem with PHP and IIS7.
Course there is no reason you cannot try it yourself if you are concerned.
Windows Azure offers a free 3 month trial. I'm not aware of any other services that provides that.
Or any Windows Vista/7 machine will have IIS7 as well.