I just attempted to compile a program which works great with version 1.6.5 I got the following errors when compiling
Arduino: 1.6.8 (Windows 7), Board: "Generic ESP8266 Module, Serial, 80 MHz, 40MHz, DIO, 115200, 512K (64K SPIFFS), ck"
C:\Program Files\Arduino\arduino-builder -dump-prefs -logger=machine -hardware "C:\Program Files\Arduino\hardware" -hardware "C:\Users\Main User\AppData\Local\Arduino15\packages" -hardware "C:\Users\Main User\Documents\Arduino\myprogs\hardware" -tools "C:\Program Files\Arduino\tools-builder" -tools "C:\Program Files\Arduino\hardware\tools\avr" -tools "C:\Users\Main User\AppData\Local\Arduino15\packages" -built-in-libraries "C:\Program Files\Arduino\libraries" -libraries "C:\Users\Main User\Documents\Arduino\myprogs\libraries" -fqbn=esp8266:esp8266:generic:UploadTool=esptool,CpuFrequency=80,FlashFreq=40,FlashMode=dio,UploadSpeed=115200,FlashSize=512K64,ResetMethod=ck -ide-version=10608 -build-path "C:\Users\MAINUS~1\AppData\Local\Temp\build78729e158635f024cce4f6c09e76f485.tmp" -warnings=default -prefs=build.warn_data_percentage=75 -verbose "E:\myUdpSendReceive\myUdpSendReceive.ino"
C:\Program Files\Arduino\arduino-builder -compile -logger=machine -hardware "C:\Program Files\Arduino\hardware" -hardware "C:\Users\Main User\AppData\Local\Arduino15\packages" -hardware "C:\Users\Main User\Documents\Arduino\myprogs\hardware" -tools "C:\Program Files\Arduino\tools-builder" -tools "C:\Program Files\Arduino\hardware\tools\avr" -tools "C:\Users\Main User\AppData\Local\Arduino15\packages" -built-in-libraries "C:\Program Files\Arduino\libraries" -libraries "C:\Users\Main User\Documents\Arduino\myprogs\libraries" -fqbn=esp8266:esp8266:generic:UploadTool=esptool,CpuFrequency=80,FlashFreq=40,FlashMode=dio,UploadSpeed=115200,FlashSize=512K64,ResetMethod=ck -ide-version=10608 -build-path "C:\Users\MAINUS~1\AppData\Local\Temp\build78729e158635f024cce4f6c09e76f485.tmp" -warnings=default -prefs=build.warn_data_percentage=75 -verbose "E:\myUdpSendReceive\myUdpSendReceive.ino"
"C:\Users\Main User\AppData\Local\Arduino15\packages\esp8266\tools\xtensa-lx106-elf-gcc\1.20.0-26-gb404fb9-2/bin/xtensa-lx106-elf-g++" -D__ets__ -DICACHE_FLASH -U__STRICT_ANSI__ "-IC:\Users\Main User\AppData\Local\Arduino15\packages\esp8266\hardware\esp8266\2.0.0/tools/sdk/include" -c -Os -g -mlongcalls -mtext-section-literals -fno-exceptions -fno-rtti -falign-functions=4 -std=c++11 -ffunction-sections -fdata-sections -w -x c++ -E -CC -DF_CPU=80000000L -DARDUINO=10608 -DARDUINO_ESP8266_ESP01 -DARDUINO_ARCH_ESP8266 -DESP8266 "-IC:\Users\Main User\AppData\Local\Arduino15\packages\esp8266\hardware\esp8266\2.0.0\cores\esp8266" "-IC:\Users\Main User\AppData\Local\Arduino15\packages\esp8266\hardware\esp8266\2.0.0\variants\generic" "C:\Users\MAINUS~1\AppData\Local\Temp\build78729e158635f024cce4f6c09e76f485.tmp\sketch\myUdpSendReceive.ino.cpp" -o "nul"
"C:\Users\Main User\AppData\Local\Arduino15\packages\esp8266\tools\xtensa-lx106-elf-gcc\1.20.0-26-gb404fb9-2/bin/xtensa-lx106-elf-g++" -D__ets__ -DICACHE_FLASH -U__STRICT_ANSI__ "-IC:\Users\Main User\AppData\Local\Arduino15\packages\esp8266\hardware\esp8266\2.0.0/tools/sdk/include" -c -Os -g -mlongcalls -mtext-section-literals -fno-exceptions -fno-rtti -falign-functions=4 -std=c++11 -ffunction-sections -fdata-sections -w -x c++ -E -CC -DF_CPU=80000000L -DARDUINO=10608 -DARDUINO_ESP8266_ESP01 -DARDUINO_ARCH_ESP8266 -DESP8266 "-IC:\Users\Main User\AppData\Local\Arduino15\packages\esp8266\hardware\esp8266\2.0.0\cores\esp8266" "-IC:\Users\Main User\AppData\Local\Arduino15\packages\esp8266\hardware\esp8266\2.0.0\variants\generic" "C:\Users\MAINUS~1\AppData\Local\Temp\build78729e158635f024cce4f6c09e76f485.tmp\sketch\myUdpSendReceive.ino.cpp" -o "nul"
"C:\Users\Main User\AppData\Local\Arduino15\packages\esp8266\tools\xtensa-lx106-elf-gcc\1.20.0-26-gb404fb9-2/bin/xtensa-lx106-elf-g++" -D__ets__ -DICACHE_FLASH -U__STRICT_ANSI__ "-IC:\Users\Main User\AppData\Local\Arduino15\packages\esp8266\hardware\esp8266\2.0.0/tools/sdk/include" -c -Os -g -mlongcalls -mtext-section-literals -fno-exceptions -fno-rtti -falign-functions=4 -std=c++11 -ffunction-sections -fdata-sections -w -x c++ -E -CC -DF_CPU=80000000L -DARDUINO=10608 -DARDUINO_ESP8266_ESP01 -DARDUINO_ARCH_ESP8266 -DESP8266 "-IC:\Users\Main User\AppData\Local\Arduino15\packages\esp8266\hardware\esp8266\2.0.0\cores\esp8266" "-IC:\Users\Main User\AppData\Local\Arduino15\packages\esp8266\hardware\esp8266\2.0.0\variants\generic" "C:\Users\MAINUS~1\AppData\Local\Temp\build78729e158635f024cce4f6c09e76f485.tmp\sketch\myUdpSendReceive.ino.cpp" -o "C:\Users\MAINUS~1\AppData\Local\Temp\build78729e158635f024cce4f6c09e76f485.tmp\preproc\ctags_target_for_gcc_minus_e.cpp"
exec: "C:\Users\Main User\AppData\Local\Arduino15\packages\esp8266\tools\xtensa-lx106-elf-gcc\1.20.0-26-gb404fb9-2/bin/xtensa-lx106-elf-g++": file does not exist
Error compiling for board Generic ESP8266 Module.
I've been using 1.6.5 for months without any of this stuff! Fortunately, since I already tried to use 1.6.7 and got a ton of errors, I use my older Win 7 machine to test new releases of the Arduino IDE.