The W3C Specification
A W3C specification that describes a means to including content from one XML document into another.
The introduction to the specification discusses its relationship with other similar technologies such as XLink and XML entities.
XInclude with Cocoon
In Cocoon 2.1 you will find a completely refactored XInclude implementation, which is (almost?) standards compliant, including XPointer.
The Cocoon documentation on XIncludeTransformer is a bit outdated, it refers still to the old implementation: XInclude Transformer
See Also
If you don't like the usage of XPointer, you maybe want to have a look on Cocoon's CInclude implementation. Of course it is Cocoon-specific, but maybe easier to use and provides other functionality like Caching and POST requests. It does however make your application non-portable. (Meaning you must use Cocoon forever! 
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