[NEWBIE] path variables not importing to emacs

[Lindsay Smith]

Hi - thanks for taking the time to read my newbie query.

The machine is Win98 (no insults please)

I have miktek installed on my machine to run latex.

I have path environment variables set to point to the bin directory of
the miktek installation, and I can run latex from the DOS command
prompt from anywhere without specifying a path.

I have not evaluated exec-path inside emacs yet (will do once I get
home).
I have manually adding the bin directory for miktek into the exec-path
variable using the emacs gui for setting variables. In my .emacs file
it does indeed have the correct path included.
   
However I still can't run latex from inside emacs!  I just get 'Bad
command or filename'.

Are there any special considerations to make regarding Win98 machines
and there horrible filename conventions?  Ie c:\Program Files\ vs
c:\Progra~1\

Help appreciated.  

Lindsay