From a late night forum browser:
This is an excerpt from a problem solution I had to deal with re: XP/Home and the DOS environment (Tomb Raider+Glidos+VDMSound). You may have already tried this, if not I hope it might help.
START EXCERPT:
For future reference to debug MSDOS/XP environment variable conflicts:
1) Go to C:\WINDOWS\SYSTEM32.
2) Edit the CONFIG.NT file and unREMark the ECHOCONFIG statement.
3) Edit the AUTOEXEC.NT file:
a) Change the "@echo off" statement to "@echo on".
b) Add a "SET" and a "PAUSE" statement to the bottom
of the file.
4) Execute the MSDOS program. When the DOS window opens the CONFIG.NT and the AUTOEXEC.NT will execute and pause before starting the MSDOS program. You should now be able to scroll up through the output and check for errors/conflicts.
This is not only needed in OS upgrades as programs such as VDMSound also edit these files (AUTOEXEC.NT specifically) and one program may conflict with another.
(Don't forget to change the AUTOEXEC.NT and CONFIG.NT files back!)
END OF EXCERPT.
Good luck,