When a <use xlink:href="..."/> refers to another <use/> element, it is not rendered.
http://philip.html5.org/demos/svg/nested-use.svg should show three blue squares. In WebKit r25545, it only shows two squares.
Firefox 2 and Opera 9.2 show three squares. Inkscape generates files with this kind of structure when using its cloning function, like in http://philip.html5.org/demos/svg/crest.svg
This works for me in feature-branch WebKit nightly build r26041 (which has many more SVG fixes):
Closing as RESOLVED/WORKSFORME. (Sorry there aren't any Windows builds of the feature-branch.)