That fixed it. Thank you so much. Just because I'm the type to never be satisfied with just getting the problem fixed...What exactly was the problem?
The definition of the PATH variable on the Windows Registry is normally stored on a value with type REG_EXPAND_SZ this will instruct the system to expand the other variables like %SystemRoot%. In your case most likely some program! changed the PATH and save it to the registry with type REG_SZ and this stops the expansion of the variables. There is probably a better explanation but this should gives you an idea...