To build your kernel you need to have a file in the top level directory that contains the following configuration variables (with the defaults that I use to build my dna kernel as an example):
CROSS_COMPILE=/home/jamiethemorris/android-toolchain-eabi/bin/arm-eabi- HOST_CC=gcc LOCAL_BUILD_DIR=dna TARGET_DIR=~/dna/updates SYSTEM_PARTITION="/dev/block/mmcblk0p32" DEFCONFIG=jamiethemorris_defconfig FLASH_BOOT='write_raw_image("/tmp/boot.img", "boot")'
The file is "jamiethemorris-build-config". In the LOCAL_BUILD_DIR you must have the following files:
initrd.img bootimg.cfg