I finally succeeded in creating a Windows binary for KQ the Betrayer, due largely to the help of the [kqlives-main] mailing list. What I ended up doing was using Mingw32 and Msys. The KQLIVES team put up all the dependencies for kq on their sourceforge download page which made it a whole lot easier. It compiled right from the box. Though the lua interpreter isnt working correctly. So it didnt compile the lua files to .lob correctly but I can just do that on my development setup on linux.
When I release the Kqthebetrayer demo in February or March there will now be a windows binary to go with it for all you windows users out there. The demo will feature over 20 original maps and a decent amount of tileset changes. I also increased the limit of entities from 41. Its currently at 47 entities. I uploaded some screenshots to the kqthebetrayer page
I guess the next step is to figure out how to do a linux package.