[AUCTeX] auctex/miktex/windows problem: "specified path is invalid"

[Emin.shopper Martinian.shopper]

Dear Experts,

I downloaded and installed the version of emacs for windows with auctex built-in along with miktex, but I get the following problem when trying to compile a file:

-------------------------
Running `LaTeX' on `report' with ``latex  -interaction=nonstopmode "\input" "
report.tex"''
This is pdfeTeX, Version 3.141592-1.30.6-2.2 (MiKTeX 2.5)
entering extended mode
LaTeX2e <2005/12/01>
Babel <v3.8g> and hyphenation patterns for english, dumylang, nohyphenation, ge
rman, ngerman, french, loaded.
(report.texlatex: Windows API error 161: The specified path is invalid.


LaTeX exited abnormally with code 1 at Fri Mar 23 16:28:07

------------------------

It seems like auctex is finding MiKTeX properly, but then it complains about an invalid path. Any thoughts?

Thanks,
-Emin