The $timeoutms argument can be used to specify the timeout in milliseconds, but isn't available in all versions. For example, it exists in php_memcache 2.2.6, but not in 3.0.4. In 2.2.6, if you specify it, then it overrides $timeout.
Caveat emptor: If $timeoutms is not specified, it defaults to the value of memcache.default_timeout_ms in php.ini, which defaults to 1000 if not set. This also overrides $timeout, which has the curious effect that $timeout is always ignored in php_memcache 2.2.6 (either in favor of $timeoutms, memcache.default_timeout_ms or the value 1000, in that order of priority).