sorry for being late to the party...

>> 2. Fix sh to deal with group'd commands and -e. Then provide nbsh as a host
>>    tool and tell make to use it.

Yep, that sounds like the right fix.

>IIRC there is an outstanding bug on netbsd's /bin/sh where:
>$ (set -e;(exit 1);echo foo)
>outputs foo.

That would confirm it.

>> 3. Go through all the Makefile's and change (... && ...) into .... && ...

Not very desirable - tossing all the optimization becuase of a broken
shell?

>Or just ... ; ...

You left out the smiley ;-)
Changes like that would break the makefile when run in compat mode.

cd xxx && yyy is correct in compat mode,
(cd xxx && yyy) is better if you want to avoid surprises in -j mode.

if either doesn't work because of a shell bug - fix the shell.

Thanks
--sjg