I don't know if anyone has noticed but, from the bug reports in the cygwin mailing list, it seems pretty obvious that setup isn't properly handling the version number field in setup.ini.
What should be happening is that the version field should be parsed first, and then, if the setup.ini version is newer than setup.exe, a warning is raised asking the user if they want to continue. This should happen before any further proessing of setup.ini happens. What is happening instead is that the whole file is parsed (causing all sorts of errors thanks to the md5 addition) and then, if setup makes it that far, the user is asked if they're sure. Unfortunately, setup doesn't make it far enough to notify the user about the problems and so, hilarity ensues. cgf