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For pserver connections, CVS on the client side tries to find the
.cvspass file in your home directory. Windows machines don't have a
natural "home" directory, so CVS consults the environment variable
%HOME%. However, you have to be very careful about how you set
HOME. This will work:
set HOME=C:
This will not:
set HOME=C:\
That extra backslash is enough to confuse CVS, and it will be unable to open C:\\.cvspass.
So, the quick and permanent solution is to put
set HOME=C:
into your autoexec.bat and reboot. CVS pserver should work fine after that.