Hm. I managed to re-create your scenario (I used 'fred' rather than 'user').

Create a directory below perl:

C:\Perl64>md fred
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Set perl5lib to point at it:

C:\Perl64>set PERL5LIB=c:\perl64\fred
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Issue the area init command:

C:\Perl64>ppm area init fred
Syncing fred PPM database with .packlists...done
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And there it is initialised:

C:\Perl64>dir fred\*
03/03/2012  04:53    <DIR>          .
03/03/2012  04:53    <DIR>          ..
03/03/2012  04:53    <DIR>          etc
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C:\Perl64>ppm area list
┌───────┬──────┬────────────────────┐
│ name  │ pkgs │ lib                │
├───────┼──────┼────────────────────┤
│ fred  │    0 │ c:/perl64/fred     │
│ site* │  256 │ C:/Perl64/site/lib │
│ perl  │  207 │ C:/Perl64/lib      │
└───────┴──────┴────────────────────┘

So then I tried to remove it, but there is no area delete command, so, first I wiped out the directory:

C:\Perl64>rd /q /s fred
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And tried area list:

C:\Perl64>ppm area list
┌────────┬──────┬────────────────────┐
│ name   │ pkgs │ lib                │
├────────┼──────┼────────────────────┤
│ (fred) │  n/a │ c:/perl64/fred     │
│ site*  │  256 │ C:/Perl64/site/lib │
│ perl   │  207 │ C:/Perl64/lib      │
└────────┴──────┴────────────────────┘

And there it was, I had recreated your symptoms. So now how to get rid of it? The first thing I tried was to delete the PERL5LIB var:

C:\Perl64>set PERL5LIB=
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And there it was all gone away:

C:\Perl64>ppm area list
┌───────┬──────┬────────────────────┐
│ name  │ pkgs │ lib                │
├───────┼──────┼────────────────────┤
│ site* │  256 │ C:/Perl64/site/lib │
│ perl  │  207 │ C:/Perl64/lib      │
└───────┴──────┴────────────────────┘