Here is a function to generate a gradient.
You specify width, heigth and 4 colors (of the 4 corners).

An image handle of the gradient image will be returned.
You can copy the returned image onto another image using imageecopy.
This can be helpful if you want to generate a shadow for example.
("Glow effect example": Generate 8 gradients, one for each side and one for each corner. The outer side of the gradients have the background color and the inner sides have a bright color such as white.)  

But beware: This function is not optimized for performance, it might become slow on big images. For shadows, better cache the generated gradients.

Note: For gradients, using true-color is highly recommended.

<?php

function gradient($w=100, $h=100, $c=array('#FFFFFF','#FF0000','#00FF00','#0000FF'), $hex=true) {

 /*
 Generates a gradient image

 Author: Christopher Kramer
 
 Parameters:
 w: width in px
 h: height in px
 c: color-array with 4 elements:
    $c[0]:   top left color
    $c[1]:   top right color
    $c[2]:   bottom left color
    $c[3]:   bottom right color
    
 if $hex is true (default), colors are hex-strings like '#FFFFFF' (NOT '#FFF')
 if $hex is false, a color is an array of 3 elements which are the rgb-values, e.g.:
 $c[0]=array(0,255,255);
 
 */
 
 $im=imagecreatetruecolor($w,$h);
 
 if($hex) {  // convert hex-values to rgb
  for($i=0;$i<=3;$i++) { 
   $c[$i]=hex2rgb($c[$i]);
  }
 }
 
 $rgb=$c[0]; // start with top left color
 for($x=0;$x<=$w;$x++) { // loop columns
  for($y=0;$y<=$h;$y++) { // loop rows
   // set pixel color 
   $col=imagecolorallocate($im,$rgb[0],$rgb[1],$rgb[2]);
   imagesetpixel($im,$x-1,$y-1,$col);
   // calculate new color  
   for($i=0;$i<=2;$i++) {
    $rgb[$i]=
      $c[0][$i]*(($w-$x)*($h-$y)/($w*$h)) +
      $c[1][$i]*($x     *($h-$y)/($w*$h)) +
      $c[2][$i]*(($w-$x)*$y     /($w*$h)) +
      $c[3][$i]*($x     *$y     /($w*$h));
   }
  }
 }
 return $im;
}

function hex2rgb($hex)
 {
 $rgb[0]=hexdec(substr($hex,1,2));
 $rgb[1]=hexdec(substr($hex,3,2));
 $rgb[2]=hexdec(substr($hex,5,2));
 return($rgb);
 }

// usage example

$image=gradient(300, 300, array('#000000', '#FFFFFF', '#FF0000', '#0000FF'));

header('Content-type: image/png');
imagepng($image);
imagedestroy($image);

?>