I'm confused about..reffering vars &$

Ok, I'm reading the manual for the new php4 stuff. Now, I'm not new to php. I started with php/fi with a little script to add links to a database. I did a little work in php3. I just don't make enough php stuff to get a frim grip on everything. That is changing as I am building a second pc to serve as a dev box for php4. Here is my first question. This was lifted from the Zend site from the php manual there. To assign by reference, simply prepend an ampersand (&) to the beginning of the variable which is being assigned (the source variable). For instance, the following code snippet outputs 'My name is Bob' twice: <?php

    $foo = 'Bob';              // Assign the value 'Bob' to $foo
    $bar = &$foo;              // Reference $foo via $bar.
    $bar = "My name is $bar";  // Alter $bar...
 echo $foo;                 // $foo is altered too.

echo $bar; ?> What I don't see here is how this prints (echo) "My name is Bob". The way I see this is that $bar = &$foo; is a backwards assignment, so that when the script cycles through, it changes $foo from Bob to "My name is $bar", and, to my error prone thinking, it should print out "My name is My name is My name is...". It would make sense to me if it were: <?php

    $foo = 'Ed';         // Assign the value 'Ed' to $foo
    $bar = &$foo;        // Reference $foo via $bar
    $bar = 'Bob';        // changing $foo to 'Bob'
    $this = "My name is $bar";
    $that = "My name is $foo";
  echo $this;                                / /  prints out My name is Bob
  echo $that;                               / /   prints out My name is Bob
Maybe I'm not seeing how php rereads or cycles through the script once it sees a "assign by reference"  Could someone explain please?

Thank you.