This describes how to update your PATH environment variable using version 1.4 of the Java 2 SDK. If you are using an earlier version, these notes will still apply (where you see j2sdk1.4.0, simply replace it with the version of the Java 2 SDK you are using).

Taken from http://java.sun.com/j2se/1.4/install-windows.html

You can run the Java 2 SDK without setting the PATH variable, or you can optionally set it as a convenience.

Should I set the PATH variable?
Set the PATH variable if you want to be able to conveniently run the Java 2 SDK executables (javac.exe, java.exe, javadoc.exe, etc.) from any directory without having to type the full path of the command. If you don't set the PATH variable, you need to specify the full path to the executable every time you run it, such as:

C:> \j2sdk1.4.0_<version number>\bin\javac MyClass.java

It's useful to set the PATH permanently so it will persist after rebooting.

How do I set the PATH permanently?
To set the PATH permanently, add the full path of the j2sdk1.4.0_<version number>\bin directory to the PATH variable. Typically this full path looks something like C:\j2sdk1.4.0_<version number>\bin. Set the PATH as follows, according to whether you are on Microsoft Windows NT or 95/98/2000/ME.

Microsoft Windows NT, 2000, and XP - To set the PATH permanently:

1. Choose Start, Settings, Control Panel, and double-click System. On Microsoft Windows NT, select the Environment tab; on Microsoft Windows 2000 select the Advanced tab and then Environment Variables. Look for "Path" in the User Variables and System Variables. If you're not sure where to add the path, add it to the right end of the "Path" in the User Variables. A typical value for PATH is:

     C:\j2sdk1.4.0_<version number>\bin
   

   Capitalization doesn't matter. Click "Set", "OK" or "Apply".

   The PATH can be a series of directories separated by semi-colons (;). Microsoft Windows looks for programs in the PATH directories in order, from left to right. You should only have one bin directory for a Java SDK in the path at a time (those following the first are ignored), so if one is already present, you can update it to j2sdk1.4.0_<version number>\bin.

2. The new path takes effect in each new Command Prompt window you open after setting the PATH variable.

Microsoft Windows 98 and 95 - To set the PATH permanently, open the AUTOEXEC.BAT file and add or change the PATH statement as follows:

1. Start the system editor. Choose "Start", "Run" and enter sysedit, then click OK. The system editor starts up with several windows showing. Go to the window that is displaying AUTOEXEC.BAT

2. Look for the PATH statement. (If you don't have one, add one.) If you're not sure where to add the path, add it to the right end of the PATH. For example, in the following PATH statement, we have added the bin directory at the right end:

   PATH C:\WINDOWS;C:\WINDOWS\COMMAND;C:
   \J2SDK1.4.0_<version number>\BIN
   
   

   Capitalization doesn't matter. The PATH can be a series of directories separated by semi-colons (;). Microsoft Windows searches for programs in the PATH directories in order, from left to right. You should only have one bin directory for a Java SDK in the path at a time (those following the first are ignored), so if one is already present, you can update it to j2sdk1.4.0_<version number>.

3. To make the path take effect in the current Command Prompt window, execute the following:

         C:> c:\autoexec.bat
   

   To find out the current value of your PATH, to see if it took effect, at the command prompt, type:

         C:> path
   

Microsoft Windows ME - To set the PATH permanently:

From the start menu, choose programs, accessories, system tools, and system information. This brings up a window titled "Microsoft Help and Support". From here, choose the tools menu, then select the system configuration utility. Click the environment tab, select PATH and press the edit button. Now add the SDK to your path as described in step b above. After you've added the location of the SDK to your PATH, save the changes and reboot your machine when prompted.