Let me just add a bit more.

You quote a line from the docs. I understand this as meaning that if I were to run a kixtart script that sets env variables and then were to immediatly run another program within this same environment that those variable would not be available. That makes sense, and is in fact what I am seeing. However, since the SET and SETM place entries in the HKCU and HKLM section of the registry then I would think that those variable would be available the next time I open a CMD session. They are not. Not immediately after someone logs in for the first time on a computer. The second time they are there however.

For instance:

Joe Newuser logs into XP system for first time.
Kixtart login script runs.
opname variable is set to NEWUSERJ in HKCU
login script exists.
Joe is sitting at a brand new desktop
Joe launches "DOS" program, but program fails bc no opname exists.
Joe logs out.
Joe logs back in.
Now he can run the "DOS" program.

Due to some poor programming the opname value MUST be in uppercase, AND I have to contend with Win9x limitations if I DON'T utilize Kixtart.