You definitally SHOULD NOT be putting the file in the /etc directory. That's a NO NO.
The best bet is probably a directory structure like this:
/path/to/server_root/
/path/to/server_root/config.conf.php
/path/to/server_root/html_public_files_directory/
/path/to/server_root/html_public_files_directory/your_script.php
The first lines of your_script.php:
<?php
require_once("../config.conf.php");
// do stuff
?>
The first lines of config.conf.php:
<?php
$USER_SET_FULL_PATH_TO_FILES = "/path/to/server_root/";
?>
Every PHP file includes the config.conf.php file, and then has available to it the configuration stuff in the config.conf.php file. No absolute paths required except for that one entry in teh config.conf.php file.