To be more specific, it's a unique template that allows you to execute PHP code. None of the other templates have this.
What happens:
1. The file in question is executed
2. The phpinclude template is executed
3. All remaining templates are generated
So phpinclude usually can handle most simple hacks with the exception of View Profile hacks and anything involving bits (i.e., single posts in a thread, single threads in forumdisplay, single forums in forumhome, etc.).
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