De Vlaam - 2010-03-27

The toolchain installer may run into the bug "Cygwin's GCC no longer supports -mno-cygwin option"
See, http://www.mail-archive.com/avrdude-dev@nongnu.org/msg02059.html

This not a bug of the toolchain installer but is caused by the use of an upgraded version of gcc.
At the moment, there is no work around, apart from downgrading gcc again.

On cywin this is accomplished as follows:
  sh /usr/bin/set-gcc-default-3.sh
then rerun the toolchain installer script, which will only retry to complile avrdude (as long as you did not clean).
It should now succeed.