If memory serves me correctly, this is what I did:
- Create a new Project using File->New->VxWorks Downloadable Kernel Module.
- Enter a name for the project and select Create project in workspace (default). Click Next a couple times, using defaults, until reaching Build Specs.
- Enable PPC603gnu, uncheck the other options. Click Finish.
- In the Project Explorer, right-click on the new project and select Properties.
- Select Build Properties, then the Build Paths tab. Click Add and and enter a new include path: $(WIND_BASE)/target/h/WPIlib
- Select the Libraries tab. Click Add and enter $(WIND_BASE)/target/lib/WPILib.a.
- Add your own files to the project, and edit as normal.
The .out file should be located at
$(WIND_BASE)\workspace\<ProjectName>\PPC603gnu\<Pr ojectName>\Debug\<ProjectName>.out. The downloader should be configured to use this file. That can be done in Window->Preferences->FIRST Downloader.
Also, note that you need to include WPILib.h, not WPI.h. I'm not sure if this was just a mistake in your post or not.