Does it make any difference to SEO/Indexed pages if some sites on my file are .php instead of .htm or .html? Thanks!!
The PHP file doesn't need to be static. Just make sure (1) you don't tack on session IDs and (2) that you keep any dynamic variables in the URL to a minimum: http://www.google.com/intl/en/webmasters/guidelines.html
So does url masking (mod rewrite) help get around all these issues? Let's say I have my page names (blue-widgets.html) based on the H1 tags (Blue Widgets).
mod_rewrite helps because it removes the variables and often keyword stuffs. the effect would be the same if the page was truly static with the same filename etc.
It may help in some limited circumstances but in the majority of cases mod_rewrite isn't necessary and won't have any discernible effect on spidering or ranking. The folklore that says it's necessary is 5-10 year old thinking. See the quote from Google above: when in doubt, go to the source.