The %HOME% environment variable is used by many programs under w32, so it's really a mess sometime. I suggest Emacs use a different HOME variable underw32, something like %EMACS_HOME% or %EHOME%. This can be backward compatible if Emacs first look for %EHOME% variable, and if not found, search for %HOME% instead. User can also set simply set %EHOME% to %HOME% to get backward compatibility.