Our base Masterpage has something like the following
As per ScottGu,
One tip to take advantage of is the relative path fix-up support provided by the head runat="server" control. You can use this within Master Pages to easily reference a .CSS stylesheet that is re-used across the entire project (regardless of whether the project is root referenced or a sub-application):
The path fix-up feature of the head control will then take the relative .CSS stylesheet path and correctly output the absolute path to the stylesheet at runtime regardless of whether it is a root referenced web-site or part of a sub-application.