After fixing the paths, I realized that I have a normal win32 FPC installation which is in the %PATH%, so it was confused which make I want (I can go to a command prompt and type in "make" and it runs make). After specifying which make to use, it would compile, but the generated nds file could not be run in an emulator or on the actual hardware. I think I may just have to wait until 2.4 release is finished.

(To clarify: The 16bit_color background example makes the no$gba emulator think it's trying to play a sound file [which it's not], and on the actual hardware the ds just makes 2 pretty black screens)