If you are located on a server with SuPHP you have to set php settings in the php.ini file; which then is automatically loaded by the system; however if you use the phpinfo(); from within the INSTALL module in Typo3 you will not see the changes you where expecting.
The correct location for the php.ini file is the installation location of your typo3 index.php ; as typo3 uses symbolic links this can be kind of tricky to find; but once you did you can add a php.ini file with your setting there. Then if you like to see the changes reflect in the install module (option: phpinfo) you also have to copy this php.ini file into the install directory of typo3. This only SHOWS you the correct settings and if you have set it correctly; but this php.ini is not used outside the /install/ directory. If you want to check the the settings in the /typo3/ directory you could create a phpinfo(); test file there to check your real settings used.
