slsnios,
to pick up the original thread,
I had the same problem using the IDE, the archive it produces on Cygwin seems to be corrupted. I use the IDE for Kernel developement, but I have also a Linux machine for compiling applications or libraries.
To bypass the problem of the corrupted archive I create the archive on Linux machine FC4 and include it in the IDE.
In the file linux-2.6.x\usr\initramfs_data.s you must specify the path where your archive resides. In the kernels menuconfig I picked the same path.
On the Linux machine you create the initramfs_data.gpio.gz archive and copy it to the directory from where it should be included.
Whenever you build the kernel in the IDE your archive gets picked instead of the IDEs archive.