I’m having the exact same problem with the AT91SAM7x eval board and Atmel example code. This is my 2nd day working with IAR and ARM processor tools etc. so I’m fairly clueless at the moment regarding how to fix this error.
I did get the Atmel example program to compile by using a newer Cstartup.s file from the IAR tools disc. Apparently the “Cstartup.s79” file in the Atmel example code is older than the one that is on the IAR disc.