> For some reason I don't understand, LyX insert system32 folder > reference before its own in PATH. > I have no control over this behavior. From what you've described, C:\Windows\system32 wasn't already on the PATH before (I mean 'outside' of LyX). Then this might exactly be the reason of its re-appearance (well... English isn't my mother tongue :). BTW how it disappeared from there? Try to re-add '%SystemRoot%\system32' right before '%SystemRoot%' to the system-wide PATH (it should always be there, it seems mandatory at least for XP - I don't know much about W7) and check whether LyX (or maybe Python?) is still adding it after restarting LyX (don't forget!) - that way either 'C:\Windows\system32' will appear twice on the script's PATH or your problem will be solved (as ImageMagick will appear before it).
Also, while you're at it, compare the settings from the virtual machine with the ones from the real system (also with the 'PATH prefix' preference from LyX). If you don't solve your problem this way, then please attach all this data (both from VM and real system, both from LyX and from the Windows' properties... maybe also from 'pure' Python script, outside of LyX), I'll try to look at these and maybe compare this all to my (working... so far :) ) system. Regards, MichaĆ