Not used ant for a very, very long time, so can't remember installing it but from your last post, I'd suggest pointing your ANT_HOME variable to c:\ant
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edit: just checked
http://ant.apache.org/manual/index.html and saw this...
Quote:
Windows and OS/2
Assume Ant is installed in c:\ant\. The following sets up the environment:
set ANT_HOME=c:\ant
set JAVA_HOME=c:\jdk1.2.2
set PATH=%PATH%;%ANT_HOME%\bin
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...although re-reading your post, am I right in thinking that c:\ant just contains a sub-directory called apache-ant-1.6.5 ? Maybe it's falling over cause of the directory name... try having it in c:\ant instead of c:\ant\apache-ant-1.6.5 and see if that makes any difference.