It won't need to pull test.txt through it so it won't stop to parse it. Obviously it will need to execute the calling script or the include will never happen.
you'd need to set a session variable - for example -
$_SESSION['valid_login'] = true
then test for it each page:
if(!$_SESSION['valid_login'])
{
header('Location:index.htm')
}
you need to put session_start() at the top of each page you want to use session variables on.
just to clarify - php doesn't get executed unless it's passed through the php parser (a program sitting on the server) and it won't get passed to the parser unless the server knows it's a php file - ie it ends in .php (or phtml or php5). You can rig .htaccess to shove everything through the...