Most cvs diff headers look something like:

Index: caps/src/Makefile.in
===================================================================
RCS file: /cvsroot/mozilla/caps/src/Makefile.in,v
retrieving revision 1.32
diff -u -r1.32 Makefile.in
--- Makefile.in 2000/05/14 10:38:48     1.32
+++ Makefile.in 2000/05/16 02:59:30


Since cvs does a relative diff against the file in question, the new & old
names only contain the basename of the file.  In order for patch to see the
relative path set in Index:, you must set the POSIXLY_CORRECT env
variable.  This is where things get weird.  

From the patch manpage:
        7 If  there  is an Index: line in the leading garbage and
          if either the old and new names are both absent or  the
          POSIXLY_CORRECT  environment  variable  is  set,  patch
          takes the name in the Index: line.

        7 For the purpose of the following rules, the  names  are
          considered  to  be  in  the  order  (old,  new, index),
          regardless of the order that they appear in the header.

        7 If  some of the named files exist, patch uses the first
          name if the  POSIXLY_CORRECT  environment  variable  is
          set, and the best name otherwise.

The problem is that if you already have a file with the same base name in
the toplevel directory, patch will use that file instead.  In the above
example, I had to remove the toplevel Makefile.in before that patch would
work.  I think that if POSIXLY_CORRECT is set, patch should use the name
from Index: regardless of the settings of old, new & a file with the same
name in the current directory.