Just remove that crap from .htaccess. These lines are meant to be used in a completely different setup than yours.
Obviously, you have Apache's mod_php5 already installed, and it is used for your PHP files automatically. That's perfectly fine! No need for mod_cgi.
However, if you really don't want to use mod_php, you should uninstall libapache2-mod-php5
before further debugging. That way it can't confuse you. (Also, this is the reason a different php.ini
is used.)
Finally, you should describe the exact behaviour instead of merely saying that it "doesn't"it doesn't work". Does it show an Apache error? If so, which one? Or, does it show the PHP source code instead of executing it? What's happening, exactly?