What about c:test.txt??? True, it can't be used to seperate directories, but I never said it could.

Yes, you did (empasis added):

I wasn't refering to $0, but to the path seperator. In unix, it's '/'. In Windows, it can be '\' and ':'.

The colon is the logical disk separator (required at least for absolute local filenames). In the case of a:file the directory separator can be optionally dropped (and the latest versions of the NT command interpreter can even handle things like disk:dir\file).