Installing nginx is straightforward, so I will not go into details, just check the nginx documentation for more.

First create a repo file.

vi /etc/yum.repos.d/nginx.repo

and add following content to repo file:

CentOS
[nginx]
name=nginx repo
baseurl=http://nginx.org/packages/centos/$releasever/$basearch/
gpgcheck=0
enabled=1

To install php 5.3.8 we need extra repos (source article).

## Remi Dependency on CentOS 5 and Red Hat (RHEL) 5 ##
rpm -Uvh http://download.fedora.redhat.com/pub/epel/5/i386/epel-release-5-4.noarch.rpm
 
## CentOS 5 and Red Hat (RHEL) 5 ## 
rpm -Uvh http://rpms.famillecollet.com/enterprise/remi-release-5.rpm

Install using added repos.

yum --enablerepo=remi install nginx php php-fpm php-common

Install necessary php modules for you.

yum --enablerepo=remi install php-pear

Start Nginx

/etc/init.d/nginx start ## use restart after update
## OR ##
service nginx start ## use restart after update

Start PHP-FPM

/etc/init.d/php-fpm start ## use restart after update
## OR ##
service php-fpm start ## use restart after update

Autostart Nginx on boot

chkconfig --add nginx
chkconfig --levels 235 nginx on
#Autostart PHP-FPM on boot
chkconfig --add php-fpm
chkconfig --levels 235 php-fpm on

Now it is time to configure nginx to work with php.

vi /etc/nginx/conf.d/test.conf

put these lines into file.

server {
    server_name example.net;
    access_log /var/logs/nginx/example.access.log;
    error_log /var/logs/nginx/example.error.log;
    root /var/www/example;
 
    location / {
        index index.html index.htm index.php;
    }
 
    location ~ \.php$ {
        include /etc/nginx/fastcgi_params;
        fastcgi_pass  127.0.0.1:9000;
        fastcgi_index index.php;
        fastcgi_param SCRIPT_FILENAME /var/www/example$fastcgi_script_name;
    }
}

restart nginx

service nginx restart

create an index file to test.

vi /var/www/example/index.php

<?php phpinfo(); ?>