STSADM Environment Variable SharePoint 2007 and 2010

Instead of navigating to the bin directory in the 12 hive, you can access stsadm.exe from any directory by adding an environment variable:

1. Start -> All Programs -> Control Panel -> System
2. On the Advanced tab, click the Environment Variables button.
3. Select the variable Path and click the Edit button.
4. Add the following to the end of the Variable value field:
   ;C:\Program Files\Common Files\Microsoft Shared\Web Server Extensions\12\BIN
5. Click OK.

Note: for 2010, add this instead:
;C:\Program Files\Common Files\Microsoft Shared\Web Server Extensions\14\BIN

Source : http://sharepointcherie.blogspot.in/2009/09/stsadm-environment-variable-sharepoint.html