AucTeX, LaTeX and TEXINPUTS

[aspfjm]

hi,

i'm a newbie at emacs/auctex/latex/linux.i use ubuntu 8.04, emacs
22.1.1, auctex 11.84 and texlive 2007.

this is the test package (placed in ~/latexpackages/test.sty):
 \newcommand{\hello}{hello world}

this is the tex file (placed in ~/hello.tex):
\documentclass{article}
\usepackage{test}
\begin{document}
\hello
\end{document}

i put my locally installed LaTeX packages in ~/latexpackages, but i
can't compile tex files from emacs. i have no problems when i use bash
(latex hello.tex -> "[...] Output written on hello.dvi (1 page, 232
bytes)." and "echo $TEXINPUTS" outputs /home/anders/latexpackages).

i think the problem is located within emacs or auctex, but i have no
idea how to fix this.

any help appreciated, thanks.