[EDITOR'S NOTE: original post and 2 corrections combined into 1 -- mgf]

Here is an implementation of the Levenshtein Distance calculation that only uses a one-dimensional array and doesn't have a limit to the string length. This implementation was inspired by maze generation algorithms that also use only one-dimensional arrays.

I have tested this function with two 532-character strings and it completed in 0.6-0.8 seconds. 

<?php
/*
* This function starts out with several checks in an attempt to save time.
*   1.  The shorter string is always used as the "right-hand" string (as the size of the array is based on its length).  
*   2.  If the left string is empty, the length of the right is returned.
*   3.  If the right string is empty, the length of the left is returned.
*   4.  If the strings are equal, a zero-distance is returned.
*   5.  If the left string is contained within the right string, the difference in length is returned.
*   6.  If the right string is contained within the left string, the difference in length is returned.
* If none of the above conditions were met, the Levenshtein algorithm is used.
*/
function LevenshteinDistance($s1, $s2)
{
  $sLeft = (strlen($s1) > strlen($s2)) ? $s1 : $s2;
  $sRight = (strlen($s1) > strlen($s2)) ? $s2 : $s1;
  $nLeftLength = strlen($sLeft);
  $nRightLength = strlen($sRight);
  if ($nLeftLength == 0)
    return $nRightLength;
  else if ($nRightLength == 0)
    return $nLeftLength;
  else if ($sLeft === $sRight)
    return 0;
  else if (($nLeftLength < $nRightLength) && (strpos($sRight, $sLeft) !== FALSE))
    return $nRightLength - $nLeftLength;
  else if (($nRightLength < $nLeftLength) && (strpos($sLeft, $sRight) !== FALSE))
    return $nLeftLength - $nRightLength;
  else {
    $nsDistance = range(1, $nRightLength + 1);
    for ($nLeftPos = 1; $nLeftPos <= $nLeftLength; ++$nLeftPos)
    {
      $cLeft = $sLeft[$nLeftPos - 1];
      $nDiagonal = $nLeftPos - 1;
      $nsDistance[0] = $nLeftPos;
      for ($nRightPos = 1; $nRightPos <= $nRightLength; ++$nRightPos)
      {
        $cRight = $sRight[$nRightPos - 1];
        $nCost = ($cRight == $cLeft) ? 0 : 1;
        $nNewDiagonal = $nsDistance[$nRightPos];
        $nsDistance[$nRightPos] = 
          min($nsDistance[$nRightPos] + 1, 
              $nsDistance[$nRightPos - 1] + 1, 
              $nDiagonal + $nCost);
        $nDiagonal = $nNewDiagonal;
      }
    }
    return $nsDistance[$nRightLength];
  }
}
?>