I've been looking around for a hosting provider. In the process I ran into one that seemed to have a clear preference for apache 1.3. Considering that 1.3 was released something like 11 years ago, I am unclear why someone would have such a preference.
At work we still use 1.3 for our main web-site. But that's because 1.3 is still the default Apache server for Solaris 8, which is what's running said web-site. Internal aps are hosted on Apache 2.2 more and more often as they're moved to Linux (SLES10 and soon 11).
Heck, NetWare 6.5 ships with 2.0 as default, and you can download 2.2 if you really want to run it. 1.3 was the default on NW6.0.
But, I am not a web-master, so I don't know the compatibility details for why Apache 1.3 could be a preferred platform. I know Apache 'just works', which may be part of it. What is it about 1.3 that is attractive over its newer brethren?
Many sysadmins prefer 1.3 because of the nifty speed it delivers contra 2.x with its "application server" -stamp. It was a valid argument about 5-6 years ago, but todays servers are so stuffed with CPU and memory that I don't bother using it anymore.
Another reason is that Apache2 introduced threaded worker modules, and while PHP could be made thread-safe, no one could guarantee anything for all the (3rd party) libraries already deployed. It was PHP policy for a long while not to support Apache2, only 1.3. Even today, on Debian unstable, PHP requires the non-threaded prefork worker, and conflicts with the threaded workers.
So your webhosts are probably still caught up in that mindset.
Although their initial motivation was licensing, you might be interested to know that the OpenBSD team maintain their own Apache 1.3 branch in the OS and backport security fixes from the newer trees.
There are some old discontinued modules that haven't been ported, and sometimes the config needs to be rewritten for 2.2.
Remember that apache2 wasn't "generally" production quality/flexibility until 2.2, at least that was the view of the major Linux distributions.
At this point I'd avoid putting 1.3 on anything new.
Of course as solaris 8 is (IIRC) now out of support you should already be off it.