I would personally stick to absolute paths.. let $_SERVER['DOCUMENT_ROOT'] do the initial root path detection (this works regardless to localhost or your live webserver, and have the same file paths listed afterwards... (EDIT: the above variable is a relative path though)
include($_SERVER['DOCUMENT_ROOT'] . '/whateverFolder1/whateverfolder2/whateverFile.php');
this assumes you have your stuff in subfolders.. when it comes to images or includes, I always have those stuffed in separate subfolders.
EDIT: Of course, if the files you are trying to access is not on your own site, then complete absolute paths are needed.