So I saw few threads asking why their server doesn't install (etc. not finding "java" command), so I decided to make a step-by-step guide with images. Sorry if a thread like this exists already, I didn't find it.
HINT: Click the images to see them full-size
Step 1
Open your Control Panel.
Step 2
Type "Advanced" in to the search field and press "View advanced system settings"
Step 3
Press the "Enviroment variables" button
Step 4
Find "Path" from the System variables list and hit "Edit"
Step 5
Into the Value end, add "[tt];[/tt]" and then add path to your java /bin directory dependant from your Java version. For me, what I should add is this:
Java6: "[tt];C:\Program Files\Java\jre6\bin[/tt]"
Java7: "[tt];C:\Program Files\Java\jre7\bin[/tt]"
Step 6
Now, hit "Ok" in every dialog and you are done! Now you should be able to launch the server installer from the .bat file.