Here's how I thought I would be able to setup NetBSD on my Netwinder.
Do a diskless boot by booting the kernel from the network using tftp
and use nfs to provide a root filesystem. Then use disklabel and
fdisk to setup the hard drive and finally extract all the necessary
binary sets.

I used base.tgz , etc.tgz and kern-GENERIC.tgz which I acquired from:
ftp://releng.netbsd.org/pub/NetBSD-daily/200206220000/netwinder/binary/sets/

When I'm greeted by the firmware prompt I set the following variables:

load-defaults
setenv netconfig_eth0 flash
setenv eth0_ip 192.168.1.6/24
setenv kernconfig tftp
setenv kerntftpserver 192.168.1.1
setenv kerntftpfile /netbsd
setenv rootconfig nfs
setenv rootpath 192.168.1.1:/usr/local/nfs
save-all
boot

That fetches the kernel from the network but as soon as it's done
downloading and about to start booting, my monitor goes blank and the
keyboard doesn't respond. Does this mean the kernel defaults to using
the serial interface for I/O or something more serious?

By the way, I upgraded the Netwinder firmware(2.3.3) by following the
instructions from this document(not sure if that might have anything to
do with this issue):
http://www.netwinder.org/howto/Firmware-HOWTO-3.html