The current texsetup has a bug with the handling of $HOME in texmf.cnf. The problem is easy to fix : when you have no HOME environment variable, be sure that your texmf-var/web2c/texmf.cnf does not use $HOME in the definition of $TEXMF. I'll update TeXSetup.exe as soon as I have sorted out other issues and reports. -- Fabrice Popineau