When I got a succesful build I also got the password warning. I solved the warning two different ways if I recall (one through a commandline argument specifying it perhaps, the other by creating a password file). The warning went away after this, and the server ran -- meaning no warning and no error, but it didn't function. The telltale sign of it not functioning was that the VNC server port was not open and accepting connections. Xvnc will open a tcp socket server on port 590x, where x is the X server number.

Mark, I mispoke-- while vncserver did build, I didn't notice that you have to descend into Xvnc, do another configure and another make world to build Xvnc (on which vncserver depends).  Tried adding that to the top level makefile, but gcc is getting invoked instead of the arm version, much like you said.
I did notice a warning message when starting the server on windows, that if you don't give the server a password, it won't accept any incoming connections.  Is it possible you problem was as simple as that?
To get Xvnc to build, we probably need to go down into the Xvnc/cf/config directory and replace the xmkmf script there with the version from tinyx.   Maybe you can take it from there?  Send me your email and I'll send the makefile in its current state.

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