I am using gpsbabel 1.3.4 with the command:

Icon handling changed in 1.3.5.  Earth 4.2 had some weirdness
w/ the RT icon display; I can't recall if 4.1 did or not.   4.3 matches
1.3.5's behavior.

 
I usually just right click on the kml and add the network link there
instead of building my own KML.