The XML Data Binding Libraries do not natively support XInclude, however some of the underlying XML Parsers do, depending on the language you are working with.
Their are a number of Xinclude implementations which are free and easy to use.
Microsoft XInclude.NET 1.2
The MVP.XML Project for .Net - http://mvp-xml.sourceforge.net/xinclude/
This allows you to read a source document into an XmlDocument link this
XmlReader reader = new XIncludingReader(XmlReader.Create("source.xml"));
XmlDocument doc = new XmlDocument();
The complete XmlDocument can then be read into generated data binding objects like this.
MyRootElm root = new MyRootElm();
XInclude support is included in the Xerces XML parser for C++:
XInclude support was included from Java 1.5, and can be enabled like this
DocumentBuilderFactory factory = DocumentBuilderFactory.newInstance();