No there is no need for php.ini in each directory according to the server tech... the script memory limit is 512mb and testing versions are reporting different memory amounts as problems.
Modx 2.0.5-pl test:
[10-Jan-2012 02:34:52] PHP Fatal error: Out of memory (allocated 10485760) (tried to allocate 7680 bytes) in /home/mysite/public_html/2.0.5-pl/core/model/smarty/sysplugins/smarty_internal_templatelexer.php on line 532
Modx 2.2.0-pl2 test:
[10-Jan-2012 17:11:06] PHP Fatal error: Out of memory (allocated 12845056) (tried to allocate 30720 bytes) in /home/mysite/public_html/2.2.0-pl2/core/model/smarty/sysplugins/smarty_internal_templatelexer.php on line 910
I've emailed him these details to see if he can track down anything related.