diff --git a/CabalGHCI.hs b/CabalGHCI.hs
--- a/CabalGHCI.hs
+++ b/CabalGHCI.hs
@@ -12,10 +12,16 @@
            f _ _ = (args, False)
 
 main = do
-  args ← getArgs
-  let (args', pretend) = opt0 "print-ghci-args" args
-  withOpts args' putStrLn $
-    if pretend then mapM_ putStrLn
-    else \opts → do
+    args ← getArgs
+    let (args', pretend) = opt0 "print-ghci-args" args
+    withOpts args' errCont $
+        if pretend then mapM_ putStrLn
+        else \opts → do
           putStrLn $ "Executing ghci with the following options: " ++ unwords opts
           rawSystem "ghci" opts >> return ()
+  where
+    errCont "Current directory is not a cabal project" = do
+          putStrLn "WARNING: no .cabal file found, falling back to default GHCi session & ignoring any passed args"
+          rawSystem "ghci" []
+          return ()
+    errCont msg = putStrLn msg
diff --git a/Distribution/Dev/Interactive.hs b/Distribution/Dev/Interactive.hs
--- a/Distribution/Dev/Interactive.hs
+++ b/Distribution/Dev/Interactive.hs
@@ -10,25 +10,28 @@
   cabalSet, packageOpts, loadCabal, lookForCabalFile, withOpts, LoadCabalRet(..)
   ) where
 
-import Distribution.Text
-import Distribution.Compiler
-import Distribution.Verbosity
-import Distribution.System
-import Distribution.Package
-import Distribution.PackageDescription
-import Distribution.PackageDescription.Parse
-import Distribution.PackageDescription.Configuration
-import Distribution.Simple.PackageIndex
-import Distribution.Simple.LocalBuildInfo hiding (compiler)
-import Data.Version
+import Distribution.Text (display)
+import Distribution.Compiler (buildCompilerFlavor, CompilerId(..))
+import Distribution.Verbosity (normal)
+import Distribution.System (buildPlatform)
+import Distribution.Package (PackageName(..), Dependency(..))
+import Distribution.PackageDescription (
+  FlagName(..), FlagAssignment, BuildInfo(..), hcOptions, allExtensions,
+  PackageDescription(..), Executable(..), allBuildInfo)
+import Distribution.PackageDescription.Parse (readPackageDescription)
+import Distribution.PackageDescription.Configuration (
+  finalizePackageDescription)
+import Distribution.Simple.PackageIndex (lookupDependency)
+import Distribution.Simple.LocalBuildInfo (LocalBuildInfo, installedPkgs)
+import Data.Version (Version, showVersion)
+import Distribution.Simple.BuildPaths (autogenModulesDir, cppHeaderName)
 
-import System.FilePath
-import System.Directory
-import System.Info
-import Data.Maybe
-import Data.Either
-import Control.Exception
-import Data.List
+import System.FilePath (takeDirectory, (</>), takeExtension)
+import System.Directory (
+  getDirectoryContents, getCurrentDirectory, canonicalizePath)
+import System.Info (compilerVersion)
+import Data.Maybe (listToMaybe, fromMaybe)
+import Control.Exception (try, SomeException)
 
 type Deps = [(PackageName, Version)]
 
@@ -50,7 +53,7 @@
   → String -- ^ name of executable
   → Maybe [String]
 packageOpts path pkg mlbi executable =
-  maybe Nothing (\bi → Just $ ghcOpts path bi (listDeps bi =<< mlbi)) $
+  maybe Nothing (\bi → Just $ ghcOpts path bi mlbi (listDeps bi =<< mlbi)) $
   listToMaybe $
     if executable == ""
     then allBuildInfo pkg
@@ -69,26 +72,43 @@
       return (pkg, ver)
 
 -- | GHC options for a 'BuildInfo'
-ghcOpts ∷ FilePath → BuildInfo → Maybe Deps → [String]
-ghcOpts path bi deps = concat $ 
+ghcOpts ∷ FilePath → BuildInfo → Maybe LocalBuildInfo → Maybe Deps → [String]
+ghcOpts path bi mlbi deps = filter validGHCiFlag $ concat $
   maybe [] ((noPkgs:) . add "-package=" . map addDep) deps :
   map ($ bi) [
   hcOptions buildCompilerFlavor,
   addf "-X" display . allExtensions,
-  addf "-i" (combine dir) . ("/dist/build/autogen":) . hsSourceDirs,
+  addf "-i" (dir </>) . (autogendir:) . hsSourceDirs,
   add "-optP" . cppOptions,
   add "-optc" . ccOptions,
-  add "-optl" . ldOptions
-  -- TODO frameworks cSources otherModules extraLibs extraLibsDirs includes 
+  add "-optl" . ldOptions,
+  const ["-optP-include", "-optP" ++ (autogendir </> cppHeaderName)]
+  -- Other cabal settings currently ignored by cabal-ghci: 
+  -- frameworks cSources otherModules extraLibs extraLibsDirs includes
   ]
   where
-    dir = takeDirectory path
+    autogendir
+      | Just lbi ← mlbi = autogenModulesDir lbi
+      | otherwise = "dist/build/autogen"
+
+    dir
+      | s@(_:_) ← takeDirectory path = s
+      | otherwise = "."
     add s = map (s++)
     addf ∷ String → (a → String) → [a] → [String]
     addf s f = map ((s++) . f)
     noPkgs = "-hide-all-packages"
     addDep (PackageName pkg, showVersion → ver) = pkg ++ "-" ++ ver
 
+    -- flags sensible for GHCi
+    validGHCiFlag "-O" = False
+    validGHCiFlag ['-','O',n] | n `elem` ['0'..'9'] = False
+    validGHCiFlag "-debug" = False
+    validGHCiFlag "-rtsopts" = False
+    validGHCiFlag "-threaded" = False
+    validGHCiFlag "-ticky" = False
+    validGHCiFlag _ = True
+
 -- | Load the current cabal project file and parse it
 loadCabal
   ∷ FilePath -- ^ usually the current directory
@@ -99,7 +119,7 @@
   flip (maybe (return NoCabalFile))
     mCabalFile $ \cabalFile → do
     gdescr ← readPackageDescription normal cabalFile
-    mlbi ← loadCabalConfig (takeDirectory cabalFile `combine` "dist" `combine` "setup-config")
+    mlbi ← loadCabalConfig (takeDirectory cabalFile </> "dist" </> "setup-config")
     case finalizePackageDescription flags (const True)
       buildPlatform compiler [] gdescr of
         Left deps → return $ MissingDeps deps
@@ -110,6 +130,7 @@
 maybeNth n (_:xs) = maybeNth (n-1) xs
 maybeNth _ _ = Nothing
 
+maybeRead ∷ Read a ⇒ String → Maybe a
 maybeRead s = case reads s of [(a, "")] → Just a; _ → Nothing
 
 -- | Load the 'LocalBuildInfo' from dist/setup-config
@@ -134,7 +155,7 @@
                         && f /= ".cabal") files
   case cabals of
     [] → lookForCabalFile (takeDirectory path)
-    [a] → return $ Just $ combine path a
+    [a] → return $ Just $ path </> a
     _ → return Nothing
 
 -- | 'cabalSet' returns a list of ghci commands (seperated by newlines) that :set the 'packageOpts' of the current cabal project
@@ -188,6 +209,9 @@
 --   :cabalset -fcabal-ghci
 --   :m - Distribution.Dev.Interactive
 -- @
+-- 
+-- After you've added those lines into your .ghci file, use the @:cabalset@
+-- command to reload your .cabal file.
 
 -- $args
 -- [@-fflag@] enable flag
@@ -195,4 +219,3 @@
 -- [@-f-flag@] disable flag
 -- 
 -- [@exec@] load options for the exec executable
-
diff --git a/cabal-ghci.cabal b/cabal-ghci.cabal
--- a/cabal-ghci.cabal
+++ b/cabal-ghci.cabal
@@ -1,26 +1,28 @@
 Name:                cabal-ghci
-Version:             0.2.1
+Version:             0.3
 Synopsis:            Set up ghci with options taken from a .cabal file
 Description: The executable cabal-ghci runs ghci with the paths and extensions needed by a cabal project. The cabalSet function can be added to your .ghci to provide the same functionality at runtime, giving you more control over the options that are set.
-Homepage:            http://code.atnnn.com/projects/cabal-ghci/wiki
+Homepage:            http://github.com/atnnn/cabal-ghci
 License:             BSD3
 License-file:        LICENSE
 Author:              Etienne Laurin
 Maintainer:          etienne@atnnn.com
 Category:            Development
 Build-type:          Simple
-Cabal-version:       >=1.6
+Cabal-version:       >=1.10
 
 Source-repository head
-    type: darcs
-    location: http://code.atnnn.com/darcs/cabal-ghci/
+    type: git
+    location: git://github.com/atnnn/cabal-ghci/
 
 Executable cabal-ghci
+  default-language:    Haskell2010
+  default-extensions: UnicodeSyntax, ViewPatterns
   Main-is: CabalGHCI.hs
-  extensions: UnicodeSyntax, ViewPatterns
-  build-depends: process
+  Build-depends: Cabal, base == 4.*, directory, filepath, process
 
 Library
+  default-language:    Haskell2010
+  default-extensions: UnicodeSyntax, ViewPatterns
   Exposed-modules: Distribution.Dev.Interactive
   Build-depends: Cabal, base == 4.*, directory, filepath
-  extensions: UnicodeSyntax, ViewPatterns