Interesting. Would you mind answering a couple of questions for me, so that I could get to the bottom of this:

1) My user-config.jam initially contained only:

import toolset : using ;
using msvc ;

Does yours have anything more interesting that might be making the difference?

2) I am using VC8SP1 on a current version of XP (32-bit). Any differences in your configuration?

3) I am using the boost build that shipped with 1.34.1 (not M12). You?

4) Would you be willing to build with the -d2 flag and paste a small snippet here so that I see what options are bing fed to the compiler?

Thanks,
Mat