Duffedwaffe wrote:
Yes, a portal inside a portal would make everything die instantly.
Let's tihnk of the universe as a giant piece of paper.
When you place a portal link, you're essentially folding this piece of paper to connect with the other point.
(ASCII art cut to save space)
The paper would fold around itself so much that it becomes an invisible blip of existance.
This is a really geeky hypothetical discussion of an imaginary technology, but I'm up for it. 
I totally disagree with the assessment above.
First, the paper analogy is badly flawed. You're not "essentially folding this piece of paper" when you place a portal link. If that were true, we would be able to observe the entire world geometry deform when we placed portals. That clearly doesn't happen. So the argument that placing a portal inside a portal would infinitely deform space is invalid.
Second, portals themselves have no mass, no substance. In a certain way of thinking, they have no physical properties of their own; rather, they erase the physical properties of the surfaces on which they are placed, like its solidity and its position in spacetime. (This is why cameras fall off the walls when you place a portal behind them. The solidity/presence of the wall is negated by the portals.) So if portals have no material existence, and by definition portals must be placed on solid objects, you could never place a portal in a portal.
Third, portals disappear whenever the surface they're on moves or rotates. This means it's impossible to place a portal on a moveable surface in order to push one portal into/through another.
Basically what I'm saying is that the question doesn't make sense. "What would happen if you place a portal in a portal?" is impossible according to the definition of portals. Their observed behavior confirms and reinforces this impossibility.
(Sorry to be a killjoy.
)