James,
This line is wrong:
c:\bcc7 $(BCDIR)\bin\brc32.exe -r -Ic:\bcc7\include\windows\sdk myapp.rc
it should be:
$(BCDIR)\bin\brc32.exe -r -Ic:\bcc7\include\windows\sdk myapp.rc
Borland Resource Compiler / Binder
Version 5.40 Copyright (c) 1992, 1999 Inprise Corporation
%bcdir%\bin\brc32