Sounds like the AD profile on the domain is overwriting the user defined variables. I see your screenshot says you are connected to the eait.org.edu.au domain. That will be the root of your issue. Just to include some details here that I spotted elsewhere, that may be of help to you:
HOMEDRIVE, HOMEPATH & HOMESHARE are set and updated via Active Directory. HOMEDRIVE & HOMEPATH are set even without a home drive set on the account; however they will be overridden by any user account properties set in AD.
Also see these KB articles:
http://support.microsoft.com/kb/841343
http://support.microsoft.com/kb/237566
http://support.microsoft.com/kb/101507
On a side-note for another way around the issue:
-I have in the past created a new instance of the windows command-line shell executable that automatically runs a custom script, so everytime you launch the shell, the environment variable could be overriden.
-To do that you could just put the code you posted to change the environment variable into a batch script, stored wherever you like, then edit the shortcut(s) used to launch the shell by going to properties > then alter the Target box: %SystemRoot%\system32\cmd.exe /K "C:\Documents and Settings\Administrator\My Documents\customshellscript.cmd" (Obviously the part of the path after /K is the location of your custom script)
This way, if you are using openSSH over the console anyway, it will always have the homedrive set correctly.