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Answer: How do I change .. to the real filename?
To answer your specifc example..
... will eat the last directory name that's up'ed by the trailing ..
To give a more general/complete example that can handle multiple .'s and ..'s at any point in the path.
We need the itterations of each loop as each substitution may reveal additional matchs.
We need multiple expressions to get the order of susbistion right. That is /../../ should colapse the two proceding directoires and not itself.
I'm sure it can be reduced more than that but it is as simple as I can see it can be and still catch all the special cases.
I use something very similar to this at the beginning of my scripts to get the conical path for $0 and not the called path. Although spliting the path into its components and working backwards is probably easier/clearer than using a regex.