Anyway if I use GCC, will the binaries be alright? I have the feeling those executables re fine on multi-MHz and multi-MB machines with swap.. but not much else 
GCC needs a lot of stack and then some, so on a vanilla Amiga 500 it will be somewhat tiring to even compile your source. I was using the DICE C-Compiler (freeware by Matt Dillon). It was a great choice for the small machine, but if you want to compile Unix code with it, you needed to fiddle with the Makefiles a lot. DICE had a much simpler yet effective approach to the build process.
I have used GCC on my Amiga 3000 and it worked fine (once you increased the stack of the shell!), but I haven't done any GUI stuff then.
On Amiga OS 4 GCC is the compiler of choice and works like a charm for all native code I have seen and a small GUI-Utility I wrote myself.
