Relative path should work fine (warning: apache on windows, as I know, don't follow the simlinks, or whatever are called on that os).
Maybe you should use the syntax (in order to avoid problem with different php versions)
ini_set('include_path', 'yourdir');
and test the return value to see if all is ok.
Turning to the best practices:
To me setting an configuration directive into a script, expecially if project-wide, is wrong, or at least dangerous.
A better practice is to put the directive into the .htaccess file in the directory that contains your php files project.
Even better, it is faster, put the directives into the appropriate virtualhost section of your apache config. For develop, though, .htaccess is more flexible and therefore preferable.
It should be something like this:
php_value include_path ".:../..:<your path collection>"
Doing this lets you share the php configuration w/o have fiddling with the ini_set directive in every php file you write.
Not to mention that if you have a special file that needs a custom include_path, you can set it in the file and this will be evident to everyone at a very rapid glance.