I always try to use virtual includes, but i always makesure it in including relative to the root directory of my website, by putting a / before the filename:

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<!--#include virtual="/navbar.inc" -->

By doing this, i can keep all my included file in a common place (normally a folder named common in my case) and then include them like this:

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<!--#include virtual="/common/navbar.inc" -->

This will work for including files from any directory in your website - you just have to know the path to the file starting in the root directory.

HTH
Alex