Turns out that the batch file thing is a fairly common issue. If you install the Powershell Community Extensions (PSCX), a pretty useful Powershell module in g

Turns out that the batch file thing is a fairly common issue. If you install the Powershell Community Extensions (PSCX), a pretty useful Powershell module in general, it has a command (Invoke-BatchFile) to execute a batch file and propagate the environment changes back to powershell. (While this is not always sufficient; I have found it to be enough for most purposes)