Yeah, what he said
And it does not have to be just a .php extension--it can be virtually any, but yeah--PHP, TXT, HTML etc. are the most frequently used (probably in that order). There are also three other closely related terms:
include_once - will only include it if it has not been previously included in the document
require - the page/script will literally die if the page to be "included" is not there
require_once - will oly include it if it has not been previously included in the document AND it exists -- else as require, it will die.
PHP.net about the include function:
http://us2.php.net/manual/en/function.include.php
a simple example:
item.php
<?php
$fruit = "apple";
?>
show.php
<?php
include "item.php";
echo $fruit;
?>
Running "show.php" would output simply output:
Apple
Basically reiterated what he just said, but yeah, I'm bored: )