Well, we're talking about two completely different animals here
SVG (Scaleable Vector Graphics) is obviously a more sophisticated way to handle certain types of graphics (lines, shapes, smooth gradients, etc...). This is a client-side image creation method, where the server only sends some mathematical data regarding the shapes, colors, and sizes involved, and the browser (or plug-in) creates the graphics. This is great for bandwidth, since a full-page graphic might only take a few lines of code (a few bytes of download), whereas a full-page bitmapped graphic such as JPG might take 120K.
The main drawback of SVG, though, is that it's not supported by all browsers, and the implementation is of course going to be different between Microsoft and Mozilla (new Netscape). SVG is also limited to images with uniform shapes, colors, etc... While it would be possible to create very complex images with SVG, at some point the amount of code needed would become more troublesome than a GIF or JPG image.
With PHP image creation, the images are created by the server, then sent to the browser as traditional JPG, GIF, or PNG graphics, taking full graphical bandwidth (while also taxing the server processor). The good thing about this, though, is that ANY browser, even the oldest, can see dynamic images, which can change depending on website content, or user interaction.