Does C:\Program Files\arduino-0008\tools/avr/bin/avr-gcc exist? Can you from a command prompt in the C:\Program Files\arduino-0008\ directory run tools/avr/bin/avr-gcc (it should say something like avr-gcc: no input files). From the same directory, can you run the first command line you posted (the one with pins_arduino.c)? Does it generate the pins_arduino.c.o file?
Now this is weird -- I moved the arduino-0008 directory to the root of my C: drive, and I changed my sketchbook to use the arduino-0008 directory's sketchbook. None of the directories have spaces in their name. All the environment variables point to where they're supposed to point. And it still doesn't work.
I opened a command prompt, went to the C:\arduino-0008/tools/avr/bin directory, and tried to run avr-gcc with no inputs. I got no text response: the computer paused for fraction of a second, and then returned the command prompt. No message along the lines of "no input files" or anything else. I tried to manually run all the other *.exe files in that directory, and got nothing: no error messages. I tried to run each program with "-h", "--h", "-help" and "--help" switches, and still got no response.
I then deleted the Arduino-0008 directory, re-downloaded the arduino-0008 software from the arduino website, and tried everything again. I'm still unable to compile, and manually running the *.exe files returns no error messages.