I have just installed an evaluation copy of UV5. I opened an existing project (which previously compiled without errors. Now when I build I get the error "Cannot open Reg932.H" In the "Manage Project Items" window I tried de-selecting "Use Settings From TOOLS.ini" and set the "INC" option as "C:\Keil_v5\C51\INC" and got the same result. When I explicitly declare the include file as C:\Keil_v5\C51\inc\Plilips\REG932.h everything is fine. The only difference I can see between an example project (which uses the same processor and works fine) and my project is that my project is located on a different drive.
Or that the working project has INC\PHILIPS listed in the compiler's "Include Paths" dialog, and you don't or just have the INC directory? The compiler looks in the directories you list, it does not iterate down subdirectory trees.
Check the Project Options, and C Compiler tab