Path is defined so you can type javac at the command
line instead of having to type
C:\j2sdk1.4.0_01\bin\javac everytime. CLASSPATH is a
Java specific variable that it uses to find classes.

First you haven't told us what OS you are using, I am
assuming Windows, but if this is Windows NT or above,
this won't work because it ignores the autoexec.bat file.