I have been working on a project lately that consists of coding a website in all php/mysql and having the xhtml code stored in a database where I can edit it from a control panel. The pages don't have that much content that requires php code.

What are you thoughts on this? Good or bad? Pros & Cons?

Bad. :)
I save HTML files from the editor and simply include them on the visible page.
This way no need to query the database all the time.

Bad. :)
I save HTML files from the editor and simply include them on the visible page.
This way no need to query the database all the time.
I have it setup so it only queries once and caches the templates in php.

coding a website in all php/mysql and having the xhtml code stored in a database I have it setup so it only queries once and caches the templates in php.

I do this too and it's giving me good results. If you are doing PHP opcode caching (eaccelerator, xcache, etc) to optimize execution times, then I think you're good to go even for some sort of big traffic :)