I didn't find any free hosting service with Php 5.3. I think till x10 feels it is extremely necessary and economical for them to install new Php version, we are not going to see any upgrade.
When Php 5 was introduced it was not adapted quickly it was used later when softwares released that require Php5 to support object oriented Php code and companies felt that it is more secure than Php4, then hosting services moved from Php 4 to Php 5.
Most of the programs runs in this Php version, so there is no extreme need.I think biggest question is when Php6 will release.In market there is books for Php6 which was going to release 2, 3 years before from present year.