I\'m using the line below to have MSBuild build a Delphi 2010 groupproj:
MSBuild C:\\src\\myprojgroup.groupproj /target:Build /p:config=Release
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Change your build configuration within Delphi, or manually yourself in the .DPROJ file. If you change the Release config itself in either of those places, you'll be fine.
Alternately, look at the .dproj file and see what the setting you want is called (eg., "IncludePath" or "OutputDir"). You can then use msbuild's /property switch. For example:
msbuild /property:WarningLevel-2;OutputDir=bin\Debug myproj.dproj
You can see these command-line switches and examples using the following from a command window prompt:
msbuild /? | more
A quick check of a .dproj file from D2007 indicates you're probably looking for either the DCC_IncludePath or DCC_UnitSearchPath properties.