I guess it is a long standing issue in the Cygnus toolchain. The
problem is this change:

--- gcc/configure.in    Fri Dec 22 13:55:48 2000
+++ gcc/configure.in    Thu Aug 17 12:02:45 2000
@@ -136,15 +136,17 @@ AC_ARG_WITH(elf,
 elf="$with_elf",
 elf=no)

-# Specify the local prefix
-local_prefix=
-AC_ARG_WITH(local-prefix,
-[  --with-local-prefix=DIR specifies directory to put local include.],
-[case "${withval}" in
-yes)   AC_MSG_ERROR(bad value ${withval} given for local include directory
prefix)
;;
-no)    ;;
-*)     local_prefix=$with_local_prefix ;;
-esac])
+# CYGNUS LOCAL: local_prefix
+#local_prefix=
+#AC_ARG_WITH(local-prefix,
+#[  --with-local-prefix=DIR specifies directory to put local include.],
+#[case "${withval}" in
+#yes)  AC_MSG_ERROR(bad value ${withval} given for local include directory
prefix)
;;
+#no)   ;;
+#*)    local_prefix=$with_local_prefix ;;
+#esac])
+local_prefix='$(prefix)'
+# END CYGNUS LOCAL

 # Default local prefix if it is empty
 if test x$local_prefix = x; then

Bascallly, it sets local_prefix == prefix, which means

$local_prefix/include == $prefix/include

It is ok and desirable for a cross toolchain as long as you don't
install it under /usr as a native compiler. Unfortunately, RedHat/ia64
does exactly that. That means $local_prefix/include == /usr/include.
Now, gcc will search /usr/include before others. It is not very good
for Linux.

# touch l.c
Reading specs from
/usr/lib/gcc-lib/ia64-redhat-linux/2.96-ia64-000717/specs
gcc version 2.96-ia64-000717 snap 001117
 /usr/lib/gcc-lib/ia64-redhat-linux/2.96-ia64-000717/cpp ...
GNU CPP version 2.96-ia64-000717 snap 001117 (cpplib)
 (IA-64)
ignoring duplicate directory "/usr/include"
#include "..." search starts here:
#include <...> search starts here:
 /usr/include
 /usr/lib/gcc-lib/ia64-redhat-linux/2.96-ia64-000717/include
 /usr/ia64-redhat-linux/include
End of search list.
l.o: l.c