Don't you have to set this up before compiling arm-linux-gcc (in the gcc conf files) or you can set it elsewhere?
I'm not sure, but probably.
I just did a grep -i 'TARGET_FPU' ./* of my OE cross directory and it only found the string in binary files.
If you run 'gcc -v' it should say, at the very end, '--with-float=soft' (that's what my cross-toolchain version says anyway).
Si