Start > Settings > Control Panel > System > Advanced > Environment Variables > Than you can add a new variable (CLASSPATH -> where the actual workpsace is and JAVA_HOME -> home directory where you install java)
Alternatively, set it for the shell you run your java app in. (i.e. open a new DOS command window, and type SET CLASSPATH=[whatever]). This way your classpath is set only for the application to which it applies, not every application you subsequently run.