I got SAM7-P64 (using AT91SAM7S64) board and wiggler clone built by
Olimex and got all software from Martin Thomas's webpage. I modified the
blinking LED code to blink only one LED and built code for RAM. I am
trying to use Insight debugger and OpenOcd to step through the code.
After loading the code when I step through it, it does not behave right
i.e. I don't see it turning on the LED.

On the other hand I used HJTAG and IAR startup kit and the two blinking
LED code from Twntyone (http://twentyone.blogchina.com) and there I can
step through properly. Using SMA-BA I loaded the FLAS with this code and
that runs fine.

During the debugging with OpenOcd/Insight when I hit continue it both
LEDs start blinking telling me that the FLASH code is being executed.

I stated insight as

arm-elf-insight -x <a .gdb file> main.elf

The .gdb file has
target remote localhost:3333
monitor reset
monitor sleep 500
monitor poll
monitor soft_reset_halt
monitor arm7_9 sw_bkpts enable
monitor mww 0xFFFFFF00 0x0001

I created this .gdb file following example from
http://www.usbdip.de/en/armdev/index.html.