I could not reproduce this on Linux/PHP 4.0.6dev with the
following structure:

/include1.php
/1/include2.php
/2/test.php

test.php =
<?php
include ("../1/include2.php");
echo "test.php\n";
?>

include2.php =
<?php
include ("../include1.php");
echo "include2.php\n";
?>

include1.php =
<?php
echo "include1.php\n";
?>

Are you maybe doing a recursive include? Does using include_once (instead of include) works for you?
If these two options don't help you, please make a tar of your reproducing scripts, and mail them to me (derick at php dot net).

No feedback. Most likely case of recursive include.

--Jani