Sorry, what I meant was that on pages on website1.com could include "website1.com/fragment.htm", but if you needed to include the same code on pages on website2.com, you would need to set up "website2.com/fragment.htm" - you can't include fragments from another server.
Hmmm, that last seven words summed it up perfectly. Why did I make such a hash of explaining it earlier?
Not necessarily; In Apache, at least, you can set the xBitHack on. If you do, you may keep the "normal" extensions, and simply set the x bit on the file using chmod +x <filename>.
Well you learn something new every day! If I'd known that 3 years ago, I wouldn't have had to mess around with mod_rewrite to map all my .htm files into .shtml ones...