Gcc recognises an athlon as "athlon" and not "k7". The problem isn't gcc not supporting building for an athlon and is more likely to be some sort of dependency. Did you take a look at the output of the configure stage when you tried to use rpmbuild? Building it manually might help find the problem. Try:
$ script configure.log
$ ./configure --build=athlon-redhat-linux
$ exit
That will save the output "./configure" in configure.log so you can look at it afterwards to see if there were any missing libraries or other errors.
An alternative would be grabbing the xine rpms from freshrpms.net and rebuilding those. You'll find them at:
http://yarrow.freshrpms.net/rpm/xine
http://yarrow.freshrpms.net/rpm/xine-lib