Msg: creating a path in xp

I am stumped as to how to create a path in windows xp for the dos environment. I went to autoexec.nt which I understood was for the purpose of creating the dos environment. created a path as I understood how to do it in dos and nothing happened. After more reading I went to control panel/system/advanced/environmental variables highlighted path when the edit box appeared saw "% surrounding system root% and realized I was seeing terms that had no meaning for me. would appreciate a reference to where I can get more information on creating and editing a path for xp.