pdfpages package runs only with 14h released of pdflatex.
To check this, type pdflatex -v. You should get:

This is pdfTeX, Version 3.14159-14h-released-20010417 (Web2C 7.3.3.1)

Once, you are sure to get this right release. You should be able to run examples given in the pdfpages package
pdflatex pdf-ex.tex  and pdflatex pdf-hyp.tex

If everything is allright then you can forget the following lines!
If not, hope this will help.

• pdflatex: http://www.tug.org/teTeX/
and: http://www.tug.org/applications/pdftex/
• pdfpages: http://www.ctan.org/tex-archive/macros/latex/contrib/pdfpages/
and installation: http://www.ctan.org/installationadvice/#installationguidelines

• Linux Workstations as root
1. teTeX distribution
• Install/Upgrade with RPM to tetex-latex-1.0.7-38.2 (Seehttp://rpmfind.net/linux/RPM/)
At this stage, TeX distribution should be installed with the pdflatex 14h-released.
 
2. pdfpages package
• Get last pdftex.def file from http://www.tug.org/applications/pdftex/
• Update pdftex.def
# cp pdftex.def /usr/share/texmf/tex/latex/graphics
• Get pdfpages package tar file from http://www.ctan.org/tex-archive/macros/latex/contrib/pdfpages/
# cp pdfpages.tar /usr/share/texmf/tex/latex
# cd /usr/share/texmf/tex/latex
# tar xvf pdfpages.tar
# cd pdfpages

# pdflatex pdfpages.ins
# pdflatex pdfpages.dtx
# pdflatex pdf-ex.tex
# pdflatex pdf-hyp.tex

# texhash

 
• Other Workstations (not as simple as with Linux!)
1. teTeX binary distribution
• Unset all previous TEX environment variables
• Get last precompiled binary (1.0) from http://www.tug.org/teTeX/ and nearest ftp site
• Install following instructions given in the INSTALL file
# mkdir binaries base doc fonts goodies
# ftp nearest.ftp.site
ftp> cd tex-archive/systems/unix/teTeX/1.0/distrib/
ftp> bin
ftp> dir binaries
ftp> prompt
ftp> mget install.sh base doc fonts goodies binaries/xxxxxxxxx.tar.gz

# install.sh
 

At this stage, TeX distribution should be installed, but not with the pdflatex 14h-released.
 
2. pdflatex (14h-released)
• Get last sources with ftp://ftp.muni.cz/pub/tex/local/cstug/thanh/pdftex/0.14h/pdftex-20010417.tgz
# mkdir ~/mypdflatex
# cp pdftex-20010417.tgz ~/mypdflatex
# cd ~/mypdflatex
# gunzip pdftex-20010417.tgz
# tar xvf pdftex-20010417.tar
• Install following instructions
# cd src
# configure --prefix=~/mypdflatex
# cd texk/web2c
Edit the Makefile and remove string `datestr` which does not exist on my different platforms
Change also the CC flag from gcc to cc (on my DEC alpha-osf platforms)
# make pdftexbin
• Copy and regeneration of pool and format files
# cp ~/mypdflatex/src/texk/web2c/pdftex ~/mytetex/bin/

# cp ~/mypdflatex/src/texk/web2c/pdftex.pool ~/mytetex/share/texmf/web2c/

# cd ~/mytetex/share/texmf/tex/latex/base
# ~/mytetex/bin/pdftex -ini -fmt=pdflatex latex.ltx
# cp pdflatex.fmt ~/mytetex/share/texmf/web2c/
 

At this stage, TeX distribution should be installed with the pdflatex 14h-released.
 
3. pdfpages package
• Get last pdftex.def file from http://www.tug.org/applications/pdftex/
• Update pdftex.def
# cp pdftex.def ~/mytetex/share/texmf/tex/latex/graphics/
• Get pdfpages package tar file from http://www.ctan.org/tex-archive/macros/latex/contrib/pdfpages/
# cp pdfpages.tar ~/mytetex/share/texmf/tex/latex

# cd ~/mytetex/share/texmf/tex/latex
# tar xvf pdfpages.tar
# cd pdfpages

# ~/mytetex/bin/pdflatex pdfpages.ins
# ~/mytetex/bin/pdflatex pdfpages.dtx
# ~/mytetex/bin/pdflatex pdf-ex.tex
# ~/mytetex/bin/pdflatex pdf-hyp.tex

# cd ~/mytetex/share/texmf
# ~/mytetex/bin/texhash
If texhash has no action (?), use
# ls -R >! ls-R
 

4. Update your path
set path=($path /your/install/teTeX/directory/bin)
5. To increase capacities of pdflatex to merge large number of pdf files,

modify the file ~mytetex/share/texmf/web2c/texmf.cnf
 
vi ~mytetex/share/texmf/web2c/texmf.cnf

replace
% Max number of characters in all strings, including all error messages,
% help texts, font names, control sequences.  These values apply to TeX and MP.
pool_size.context = 750000
pool_size = 125000

by
% Max number of characters in all strings, including all error messages,
% help texts, font names, control sequences.  These values apply to TeX and MP.
pool_size.context = 750000
% 29/03/2002 Added and changed by Patrick Brockmann to avoid error:
% ! TeX capacity exceeded, sorry [pool size=66743].
% Informations taken from RPM tetex-1.0.7-38.2 in same file (texmf.cnf)
% Initial value is pool_size = 125000
pool_size.hugelatex = 750000
pool_size.hugetex = 500000
pool_size.jadetex = 750000
pool_size.pdfjadetex = 750000
pool_size.pdflatex = 750000
pool_size.pdfxmltex = 500000
pool_size.xmltex = 500000
pool_size = 250000