With much greatly appreciated assistance from PodMaster, I've (finally) managed to get this to work.

Here is the step-by-step process for building Perl 5.8.1-RC2 from the cpan source for Win32 using Borland BCC 5.5 (free compiler) and dmake (I forget where I got this from but it was also free?).

Note: the procedure outlined here disables LARGE_FILES ( > 4 GB) support and PerlIO Support to work around problems caused by the differences between Borland and MS VC++ libraries.

1. Edit win32/makefile.mk

   1. Edit lines 24/25 to say where you want your new version of perl to be installed.
   2. Comment out line 37 # INST_VER    *= \5.9.0
   3. Comment out line 48 #INST_ARCH    *= \$(ARCHNAME)
   4. Comment out line 76 #USE_PERLIO    *= define
   5. Comment out line 82 # USE_LARGE_FILES *= define
   6. Comment out line 102 # CCTYPE        *= MSVC60
   7. Uncomment line 104 CCTYPE        *= BORLAND
2. Edit win32/config_H.bc

   Comment out line 3316 /* #define    USE_LARGE_FILES        /**/

3. Issue the command dmake from the win32 directory.

   Completes with no errors but several warnings are issued. This seems to be the status quo.

4. Issue the command dmake test from the win32 directory.

   Quite a few tests fail. Some are explainable by a conflict on my system with a comand t.exe which seems to interfere with a few of the tests. Some are explained by my firewall preventing socket tests from working.

   Three failures of the threaded stress tests resulted in Seg faults (Trap Ds) which I cannot yet explain. The mysterious "1 SUBTEST UNEXPECTEDLY SUCCEEDED" remains a mystery:)

   The testing summary is

   Failed Test                      Stat Wstat Total Fail  Failed  List o
   +f Failed
   ----------------------------------------------------------------------
   +---------
   ../ext/Socket/socketpair.t        255 65280    ??   ??       %  ??
   ../ext/threads/t/stress_cv.t                   64   45  70.31%  20-64
   ../ext/threads/t/stress_re.t        4  1024    64   90 140.62%  20-64
   ../ext/threads/t/stress_string.t               64   45  70.31%  20-64
   ../ext/threads/t/thread.t                      25    1   4.00%  25
   ../lib/Net/Ping/t/190_alarm.t       2   512     6    1  16.67%  6
   ../lib/Net/Ping/t/450_service.t                26    4  15.38%  8-10 2
   +2
   ../lib/Pod/t/eol.t                  2   512     3    2  66.67%  1-2
   ../lib/Test/Simple/t/fail-more.t                2    1  50.00%  2
   io/dup.t                                       12    2  16.67%  6-7
   op/taint.t                                    206    2   0.97%  1 31
   win32/system.t                               1008   10   0.99%  999-10
   +08
    (1 subtest UNEXPECTEDLY SUCCEEDED), 86 tests and 643 subtests skipped
   +.
   Failed 12/808 test scripts, 98.51% okay. 158/76058 subtests failed, 99
   +.79% okay.
   dmake.exe:  Error code 32, while making 'test'
   [download]

   The 98% and 99% OK figures are encouraging, but not totally convincing.

5. Issue the command dmake install from the win32 directory.

   This completes with 568 File(s) copied on my system.

I'm still trying to track down and correct the errors that required large file support (less of an issue for me) and the PerlIO subsystem (which is more of an issue, but could be related). If I succeed, I'll update this post with my findings.