When including one template in another what you actually do is eval the inner tamplate to a variable and then pass that variable to the outer template.
So for instance say you had a really simple innerTemplate that wraps <tr> tags around a series of entries
you might have this code
PHP Code:
foreach ($foo as $bar)
eval('$innerBit .= "'.fetch_template('tr_wrap_bit').'";');
where the tr_wrap_bit sees the $bar variable.
Now you have a string ($innerBit) which contains a concatenation of the innerTemplate. You can simply then pass this variable to the next layer of template.