.Xdefaults not being read

I just installed cygwin on Windows 2000 using the setup file. I used the default installation plus all of the X11 files. I'm now having trouble with xterms starting up without picking up the configurations in ~/.Xdefaults. when I try to do a xrdb ~/.Xdefaults, I get the following error:

/bin/sh: cpp: command not found

Very strange .. what does xrdb have to do with C++?