[texworks] Message from TeXworks user

[John F. Hughes]

Hi. 

I'm trying to use TeXworks with TeXLive on a windows box. I'm stuck trying
to set the TEXINPUTS variable. 

I have a large project (a book), each chapter in its own directory, and all
my latex stuff in a LATEX dir. Short picture:

book/
   Jmaster.tex

   LATEX/
     siunitx.tex
     graphicsbook.cls
     ...

   chapter1/  
     chap1.tex
   chapter2/
     chap2.tex
   ...

I've got TeXworks installed, and the file "Jmaster.tex" loaded. I try to
process it with pdfLaTeX, and I get the following:

This is pdfTeX, Version 3.1415926-2.3-1.40.12 (Web2C 2011)
 restricted \write18 enabled.
entering extended mode
(./Jmaster.tex
LaTeX2e <2011/06/27>
Babel <v3.8m> and hyphenation patterns for [...]

! LaTeX Error: File `graphicsbook.cls' not found.

==============
On my Linux system, where I use this a lot, I have set TEXINPUTS=.:./LATEX:,
and everything works fine. 
I'd like to do that under windows as well. I've tried putting a texmf.cnf
file in the "book" directory, but it seems to be ignored. In it, I put

TEXINPUTS                 = .;./LATEX;

and 

TEXINPUTS                 = .;.\LATEX;

but neither one seemed to have any effect -- I got the same error. 

I'd rather NOT set an environment variable if I can help it -- I'd rather
that this particular path was a property of this particular project. 

Any suggestions? I have a feeling I need to set SOMETHING under
Edit/preferences/Typesetting. A friend, who is using miktex, sent me his
settings, which are 

Prog: miktex-pdftex.exe
Args: 
-synctex=1
-undump=pdflatex
-include-directory=C:\Users\David\[...]\book\LATEX

where I've elided about 4 levels of directories with long names. I tried
just changing the miktex-pdftex to 'pdftex', but it appears that pdftex from
texlive doesn't understand the -include-directory flag (I *did* reset it to
point to ./LATEX !)

Thanks in advance for any help you can provide.
--John

----- configuration info -----
TeXworks version : 0.4.3r858 (official)
Install location : C:/Program Files/TeXworks/TeXworks.exe
Library path     : C:/Users/jfh/TeXworks\
pdfTeX location  : C:/texlive/2011/bin/win32/pdftex.exe
Operating system : Windows 7 Service Pack 1, 32-bit
Qt4 version      : 4.7.3 (build) / 4.7.3 (runtime)
------------------------------