Alternatively, you could try running make from the command line.
If the Makefile is in the same directory as your code, you should be able to just open a command prompt, cd to the right directory, and type "make" and press enter.
Do you have AVR studio on a different drive than your source code or the Arduino core?
Also, you might want to write another post describing your problems getting the Arduino environment working. If we can figure out what's wrong, that might be an easier option than using AVR studio.
Hmm... can you post the Makefile? Or at least any of the lines you needed to edit to configure it?
Try include the appropriate number of ../ 's. E.g. if your code and Makefile are in c:\source\blinky, you'd want:../../ROBOTS/arduino-0008/lib/targets/arduino