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cox model with time-dependent covariates

You do not necessarily have to have one observation per time-window if you use a Cox mode, you just need a new record every time the time-dependent variable changes.

You would presumably get a better feel for you data and an easier access to the analyses if you used the Lexis facilities in the Epi package.
Two papers have recently appeared in Journal of Statistical Software 
http://www.jstatsoft.org/, describing this:

Lexis: An R Class for Epidemiological Studies with Long-Term Follow-Up
Vol. 38, Issue 5, Jan 2011
Authors: Martyn Plummer, Bendix Carstensen

Using Lexis Objects for Multi-State Models in R
Vol. 38, Issue 6, Jan 2011
Authors: Bendix Carstensen, Martyn Plummer
 
Best regrads,
Bendix Carstensen
ox-regression.pdf)