Server Side Includes (SSI) are a powerful tool for code re-use and to make site maintenance easier. Include files can themsevles include other files, allowing for cascading include files. This can make it much easier for the developer to maintain a consistent site. One of the most popular uses for SSIs is to create uniform headers and footers, often with menu items. On a previous version of AspAlliance.com, I had both a standard header and a standard footer, which were referenced from one include file, called articleformat.asp.
Whenever possible, you should avoid simply including files inline in your ASP code. The reason for this is that if any variables are defined or changed in the included file, your ASP page may bomb due to a duplicate declaration or behave unexpectedly with the new variable's value. By using functions for all of your include files, you can place all of your includes at the top of your ASP file, where you can quickly see which files any given page depends on. Variables within the function are of local scope, so there is no need to use hacks like making up strange variable names in order to avoid name conflicts. Wherever you want to use the include file, you simply add a line of code invoking the function. For many of my library functions, I name the include file the same as the function to make it easy to tell which functions are in which files and what they're called.