You need the target userspace headers aswell, not just the kernel
headers. Try hacking around it by stealing the headers from an already
built glibc and plunking /usr/include into $PREFIX/arm-linux/include.
That's a bit kludgy... why not use http://kegel.com/crosstool,
which builds gcc and glibc from scratch? Or at least look at
how it does things; it might help you get past your next problems.
I must admit that crosstools does it the clean way, by getting glibc to
partially install the target headers with their appropriate
configuration. My suggestion to Manoj was indeed a quick and dirty
kludge.