mapbox/tilemill — Issue #1192: escape  %USERPROFILE% in run-tilemill.bat 
Author: misterboo
Created: 2012-01-19 22:46:51+00:00
State: open

You need to escape %USERPROFILE% in run-tilemill.bat

In win xp this variable resolve to

%SystemDrive%\Documents and Settings\{username}

without escaping it wont work because of the whitespaces in the path