diff --git a/Changelog b/ChangeLog
similarity index 94%
rename from Changelog
rename to ChangeLog
index b2f00ca2..fe21f802 100644
--- a/Changelog
+++ b/ChangeLog
@@ -1,3 +1,7 @@
+1.2 (20120927)
+	- Fix installation paths encoded in finit binary
+	- Update README with section on building and enviroment variables
+
 1.1 (20120927)
 	- Build fixes for ARM eabi/uClibc
 	- Rename signal.[ch]-->sig.[ch] to avoid name clash w/ system headers
diff --git a/Makefile b/Makefile
index 21314ed5..a1c389a8 100644
--- a/Makefile
+++ b/Makefile
@@ -25,11 +25,18 @@
 
 # Top directory for building complete system, fall back to this directory
 ROOTDIR    ?= $(shell pwd)
+
+# Installation paths, always prepended with DESTDIR if set
+prefix     ?= /usr/local
+sysconfdir ?= /etc
+datadir     = $(prefix)/share/doc/finit
+mandir      = $(prefix)/share/man/man8
+
 # Plugin directory, fall back to this directory if unset in environment
-PLUGIN_DIR ?= /lib/finit/plugins
+PLUGIN_DIR ?= $(prefix)/lib/finit/plugins
 
 #VERSION    ?= $(shell git tag -l | tail -1)
-VERSION    ?= 1.1
+VERSION    ?= 1.2
 EXEC        = finit
 PKG         = $(EXEC)-$(VERSION)
 ARCHIVE     = $(PKG).tar.xz
@@ -46,11 +53,6 @@ CPPFLAGS   += -DPLUGIN_PATH=\"$(PLUGIN_DIR)\"
 LDFLAGS    += -rdynamic
 LDLIBS     += -ldl
 
-prefix     ?= /usr/local
-sysconfdir ?= /etc
-datadir     = $(prefix)/share/doc/finit
-mandir      = $(prefix)/share/man/man8
-
 include common.mk
 export PLUGIN_DIR ROOTDIR CPPFLAGS
 
diff --git a/README.rst b/README.rst
index 4481d054..511d897a 100644
--- a/README.rst
+++ b/README.rst
@@ -66,6 +66,84 @@ Finit handles SIGUSR1 and SIGUSR2 for reboot and halt, and listens to
 /dev/initctl so standard Linux reboot and halt commands should also
 work.
 
+Building
+--------
+
+The finit build system does not employ the GNU Configure and Build System,
+instead standard makefiles are used. The user is encouraged to make source
+code changes, using defines and conditionally building plugins instead to
+alter the behavior of finit.
+
+The following environment variables are checked by the makefiles and control
+what is built and where resulting binaries are installed.
+
+**ROOTDIR=**
+   Top directory for building complete system, used in pretty printing
+
+**PLUGINS=**
+   List of stock finit plugins to build and install.
+
+**PLUGIN_DIR=**
+   Absolute path to where finit should look for dynamically loadable plugins
+   at runtime. At installation prepended by ''DESTDIR'' and ''prefix''-
+
+**VERSION=**
+   Defaults to the currently released version of finit, e.g., 1.2 but can
+   be overridden by packages to add a suffix or completely alter the version.
+
+**CFLAGS=**
+   Standard CFLAGS are inherited from the build enviornmant.
+
+**CPPFLAGS=**
+   Standard CPPFLAGS are inherited from the build enviornmant.
+
+**LDFLAGS=**
+   Standard LDFLAGS are inherited from the build enviornmant.
+
+**LDLIBS=**
+   Standard LIBLIBS are inherited from the build enviornmant.
+
+**prefix=**
+   Path to where resulting binaries should install to. Used in concert
+   with the ''DESTDIR'' variable. Defaults to /usr/local
+
+**sysconfdir=**
+   Used after ''prefix'' to create the path to finit.conf configuration
+   file. Defaults to /etc
+
+**DESTDIR=**
+   Used by packagers and distributions when building a relocatable
+   bundle of files. Alwawys prepended to the ''prefix'' destination
+   directory.
+
+**Example**::
+
+  $ tar xfJ finit-1.2.tar.xz
+  $ PLUGINS="initctl.so hwclock.so" prefix= DESTDIR=/tmp/finit/dst \
+    make -C finit-1.2/ clean install
+  make: Entering directory `/home/troglobit/finit-1.2'
+    CC      finit.o
+    CC      conf.o
+    CC      helpers.o
+    CC      sig.o
+    CC      svc.o
+    CC      plugin.o
+    CC      strlcpy.o
+    LINK    finit
+    CC      plugins/initctl.o
+    PLUGIN  plugins/initctl.so
+    CC      plugins/hwclock.o
+    PLUGIN  plugins/hwclock.so
+    INSTALL /tmp/finit/dst/sbin/finit
+    INSTALL /tmp/finit/dst/lib/finit/plugins/initctl.so
+    INSTALL /tmp/finit/dst/lib/finit/plugins/hwclock.so
+  make: Leaving directory `/home/troglobit/finit-1.2'
+
+In this example the finit-1.2.tar.xz archive is unpacked to the user's
+home directory, built and installed to a temporary staging directory.
+The enviroment variables ''prefix'', ''DESTDIR'' and ''PLUGINS'' are all
+changed to suit this particular build.
+
 
 Debugging
 ---------
diff --git a/plugins/Makefile b/plugins/Makefile
index cf03d2ef..e6216b92 100644
--- a/plugins/Makefile
+++ b/plugins/Makefile
@@ -2,7 +2,7 @@
 CFLAGS      = -fPIC -g -Os
 CPPFLAGS   += -I..
 LDFLAGS     = -shared 
-PLUGINS     = initctl.so alsa-utils.so bootmisc.so dbus.so hwclock.so \
+PLUGINS    ?= initctl.so alsa-utils.so bootmisc.so dbus.so hwclock.so \
 	      resolvconf.so urandom.so x11-common.so
 DEPS        = $(addprefix .,$(PLUGINS:.so=.d))