ghell...sorry to be a pain...but you actually need to use the CLASSPATH variable...and it should at the least contain the following value ".;"

classpath

Yeah, a dot and a semi-colon....why you might ask?...here is a simple answer.

The dot instructs the javac command to look for class definitions in the same directory of your file...before looking else where (JAVA_HOME). This means that if you have packages in your project...javac won't have problems compiling your files because it will start looking there first...and obviously...speed up the whole process of compilations.

Therefore...I would recommend the following setup

JAVA_HOME=C:\Program Files\Java\jdk1.6.0_01;
PATH=%JAVA_HOME%\bin;%PATH%;
CLASS_PATH=.;