I assume you're referring to --with-libpike, right? I looked through the code, and its effects seem to be limited to the configure script. There also seems to be a target for libpike.o, but I don't see any source for that. Is this what you're referring to when you say there are makefile problems?
Bill
I would suggest just using the current CVS version and using the embedded-option to confiure. (Don't remember the exact name right now)
If you have some use for embedding Pike right now, that ought to be more then enough motivation for you to tinker enough with the makefiles to make it compile.
Then, you will probably have to write your own master etc, since you may or may not want to include all functionallity of Pike, but that is a whole different story. Start by just making the lib compile.
As a final note: It was a few months since my last attempt to compile it. Maybe Grubba has fixed the problem already, assuming it's not my compile-setup that was broken...