It gets better.
There is something quite wierd going on here.
I just wanted to upgrade cygwin1.dll so I downloaded cygwin-1.5.9-1.tar.bz2
from
ftp://ftp.mirror.ac.uk/sites/sources.redhat.com/pub/cygwin/release/cygwin/
I then went into cygwin (bash), changed to /cygdrive/c/cygwin (where I had
put the bzip2 file) and did a bunzip2 cygwin-1.5.9-1.tar.bz2
No problem, it ran fine and I was left with a cygwin-1.5.9-1.tar file in
c:\cygwin (or /cygdrive/c/cygwin depending on your view).
I figured that cygwin would not work too well if I used (cygwin) tar to
extract the files from within (cygwin) bash.
So I closed the bash prompt (I'm now not running any programs compiled
against cygwin1.dll of any version) and then brought up c:\cygwin in a
Windows Explorer window.
Now it gets wierd...
Next I ran Winzip to extract the files from the tar.
It opened fine and showed me the list of files. When I pressed the
"Extract" button it started to extract files and (as expected) asked me if
it was OK to overwrite existing files. I said "yes" and off it went. But,
guess what, after extracting about 15 files it hit a snag and reported "disk
full".