What is the function __construct used for?

__construct was introduced in PHP5 and it is the right way to define your, well, constructors (in PHP4 you used the name of the class for a constructor). You are not required to define a constructor in your class, but if you wish to pass any parameters on object construction then you need one.

An example could go like this:

class Database {
  protected $userName;
  protected $password;
  protected $dbName;

  public function __construct ( $UserName, $Password, $DbName ) {
    $this->userName = $UserName;
    $this->password = $Password;
    $this->dbName = $DbName;
  }
}

// and you would use this as:
$db = new Database ( 'user_name', 'password', 'database_name' );

Everything else is explained in the PHP manual: click here

__construct() is the method name for the constructor. The constructor is called on an object after it has been created, and is a good place to put initialisation code, etc.

class Person {

    public function __construct() {
        // Code called for each new Person we create
    }

}

$person = new Person();

A constructor can accept parameters in the normal manner, which are passed when the object is created, e.g.

class Person {

    public $name = '';

    public function __construct( $name ) {
        $this->name = $name;
    }

}

$person = new Person( "Joe" );
echo $person->name;

Unlike some other languages (e.g. Java), PHP doesn't support overloading the constructor (that is, having multiple constructors which accept different parameters). You can achieve this effect using static methods.

Note: I retrieved this from the log of the (at time of this writing) accepted answer.

Its another way to declare the constructor. You can also use the class name, for ex:

class Cat
{
    function Cat()
    {
        echo 'meow';
    }
}

and

class Cat
{
    function __construct()
    {
        echo 'meow';
    }
}

Are equivalent. They are called whenever a new instance of the class is created, in this case, they will be called with this line:

$cat = new Cat();