The python class arch_pentium_mmx specified in /usr/lib/catalyst/arch/x86.py currently only differs from i586 in USE=mmx. It doesn't add -mmmx to CFLAGS, nor does it set -march=pentium-mmx. I suggest setting CFLAGS="-O2 -march=pentium-mmx" for the pentium-mmx subarch.
Support for -march=pentium-mmx (and -mmmx) was added in GCC 3.1.1 according to http://gcc.gnu.org/gcc-3.1/changes.html
Added to catalyst 2 in CVS...
Cool, thanks Chris.
Since the catalyst 2.0_rc* series is no longer in package.mask, I am marking this one as RESOLVED...