Packaging -- yet another confused person

I thought that I understood where to put packages, but I just updated to b40-pre2 using CVS and was disabused of this conceit. I had downloaded several of the package tarballs from binary-packages and untar'd them into /usr/local/lib/xemacs/packages. Under b38, the installed xemacs found them. I just rebuilt after updating from CVS and now the new executable does not find the .el's when run out of the build directory. Where have I turned wrong this time. This is cygwin/W95 if it matters. TIA david