Am I missing something ?
Yes, you need the bootscript from tangrs.
You don't give the kernel the parameter "root=/dev/sda" or "root=/dev/sda1".
By the way, the -j option forkbombed my pc. I recommand to use -j8 instead.
Really? It runs fine for me, if I run it on tty1.
It's probably a good idea to take a look at this. I'm not sure if this will work, but this will certainly help you get a working ARM compiler on your Linux box.
Yes, I used this script and it works fine for compiling the kernel.
does it means its working and i dont have wifi? or does it means that it still doesnt recognize my dongle?
It can't find the firmware. You need to find it and put it in the right directory on your usb-stick.