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I've neither been able to accomplish such a feat, nor have I been able to successfully adjust the .htaccess file to successfully read php inside the html file - my end result was firefox wanting to download all .html pages I tried to visit.
had to duplicate the includes folder to each subdirectory
That doesn't sound right. You likely have your includes linking via relative paths. There is a message in the PHP Forum library that describes one way to control your include files [webmasterworld.com] that may be of interest to you:
*** You need to rename all your pages that use the include as .php and not .html ***
Never do this. Giving every page of your site a new URL is a very very bad idea. You lose all of your backlink credits. Every entry in any search engine SERPs returns a 404 error. Your traffic will dry up in hours, and take many months to recover. Use the AddHandler directive instead.
If you really do have to rename the files, set up a rewrite so that requests for the old .html URLs will still pull content from the new .php files, without revealing the new file names. Carry on linking to .html URLs within the site, so that people still see the same old URLs 'out on the web'.