Is it ok to have the readme file within the program itself instead of having a separate file?

Technically it is allowed, but it is more preferred to have a separate file.

It's great to use both. Put a help section in the program, and full technical details in the other readme file.

If you're asking if it will still be accepted into the archives, the answer is no.

While this topic is running, I think I should add a list of things you should add to a readme file.

The read me should Include:

(Given by the Cemetech Staff)
A good description of what the program is, and how it works
Author info/contact information
How to load game onto the calculator
Inform user of shells/other programs they should already have on the calculator to run that program
Instructions for using the program
Credit other authors for code/routines used

(other things that would be nice for the user to know)
List of uncommon variables used in the program (such as pics, lists, matrices, AppVars, groups, ect.)
A disclaimer if your program could possibly crash the calculator (ASM targeted there mostly, though hybrid can cause this)

When people see an interesting file, they don't want to be forced to install it in order to be able to read instructions and see what the file contains. Also, on most TI websites (Omnimaga and Cemetech for example), it's against the rules to submit files that lack an external readme.txt in their respective downloads section (they will be rejected).

So I would recommend having at least 1 copy in txt format.