WARNING: Playing around like this could really hose up your system.

IIS actually runs under the local SYSTEM account. You might be able to remove the system level environment variables and add them to the user environment variables for the SYSTEM account instead. Under Windows XP the registry key is:

HKEY_USERS\S-1-5-18\Environment

You might also have to change the account web users run under (last time I used ISS, which was several years ago, it was IUSR_<machine_name>).

WARNING: Changes to the registry can be very dangerous! For that reason I intentionlly left out "hand-holding" information. If any of this seems vague or confusing you should just forget you ever read this post!

Updates: Changed the second warning message and added mention of the web user account.