lol, me again! Am I hogging the answers? Should I wait and give folks a chance to log on and see your question?
Nah. I'll post what I know about it, maybe someone can amplify if they know more...
Sphagnum moss is used a lot by growers when they're first potting up seedlings from flask. The stuff holds water for a long time and also has a reputation for having anti-fungal properties. Because of its incredible water retention, it's great for Paphs and Phrags that shouldn't be allowed to dry out and need to stay consistently damp.
The unfortunate part is that I've seen a lot of Phals and Dendrobiums at the chain stores and places that are potted up in it, and those poor plants just end up with rotted roots after a few weeks because the sphagnum stays absolutely sodden.
Since there's no set watering schedule that works under everyone's conditions, I suppose that if you were growing somewhere like Arizona where the air is consistently dry, growing in sphagnum would make sense. With our conditions here though, we don't use it at all for potting; our stuff is potted in bark, coconut, perlite, and charcoal; we water on average about twice a week, less in winter, and we'd just end up with rotted everything if we used sphagnum. We may sometimes scatter a few strands of it on top of the medium but that's purely for decoration.
From what I've read and heard by talking to other growers, most feel that sphagnum just isn't suitable for long term growing. Re-potting needs to be done much more often with it, and adult plants just stay way too wet (at least, they would for us, anyways).
Are any of your Phals potted up in it?