Thanks, that's very interesting, maybe I should give cygwin another try. Last time it was a couple of years ago and I had all the mentioned problems, then I decided to wait until a 64bit version before trying it again...
If I had to guess, I'd say somehow you ended up with text-mode mounts in your previous experience. The default, and recommended, is binary mode, but you're given a choice on install. It affects C programs that specify "t" to fopen() and friends, and causes Cygwin to convert line endings to and from DOS. But it's more trouble than it's worth.