First, make sure that the "include_path" directive in "php.ini" points to the directory where you want your includes. By default, this should be "./" which would cause require() to look for the specified file in the directory of the script executing the require(). I take it from the text of the error that your "include_path" directive is blank.
My guess is that your "login.php" probably is not in the same directory as "functions.php" and specifies a relative path to it:
require('/common_files/functions.php');
This would cause "login.php" to find "functions.php" just fine, but now "finctions.php" is looking for "common.inc" relative to the directory where "login.php" is (ie, in the same directory as "login.php") and...crash.
This is because of that blank "include_path" directive. If you put the "./" back into "include_path" then require() and include() look to it first (which would be the directory of the script executing the require) and fix your problem.
-- Rich Rijnders
-- Irvine, CA US