What's the 411 on Environment Variables?

I have had really mixed results using environment variables in SVS packages. Most of the time what seems to happen is I capture Application X. I look at the registry key for env var HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Control\Session Manager\Environment\Path (or some standalone variable) and everything looks ok. It will capture the entire key whatever is currently on the machine. So I will delete out the part of the path that is in our standard basebuild (C:\WINDOWS\system32;C:\WINDOWS; etc) and leave just the part that was added by the install. When I import the package with and administrative account than logoff login with a locked down user and try launching the application, depending on the app I will get an error that tells me there is something wrong with the Path or env var. If I open a cmd prompt and type Path I will not see the addtions to Path that should come from the package. If log in as an admin user I will see path and env var and it will work ok. I have even seen if I open the system properties doing a runas with an admin account and look at the Path or env variables than it will show up for the locked down user. Obviously this work around I have to do is not going to work when deploying to locked down end users. Has anyone else seen this behaviror before? This is pretty consistent in most packages I have captured. What I have done for some packages is add a OnEvent script that adds to the Path or env var locally. But again this is not ideal. I am using the latest 2.1.3062 and all machines are XP SP2. Any help would be appreciated.