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AFAIK, although it doesn't normally make a difference, PHP files should ideally be uploaded in ascii mode. The reason is that different platforms use different line feed characters. Window systems use LF + CR (line feed + carriage return), Macs use a single CR and Linux systems use a single LF.
For example, if a PHP file has been created in a Mac text editor and zipped using a Mac archive utility, when you decompress it and view it using a PC text editor like notepad (not a dedicated PHP file editor) the 'foreign' line feed chars appear as little black or white blocks. The line breaks are destroyed.
If you then upload the file in binary mode to a Unix server, the format (or lack of it) is preserved. In my experience this can, on rare occasions, cause a script not to work. If you upload using ascii mode, the line feed characters in the files are automatically converted to the format of the target server OS.
Having said that, I'm afraid I have never experienced the FTP process blending files together instead of overwriting them.
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