I can't replicate your problem

>c:\progs\perl588\bin\perl -e"system 'dir'"
 Volume in drive C is TRIBBLE05a
 Volume Serial Number is 28AB-0E8B

 Directory of C:\Documents and Settings\ikegami\test

2008/05/15  11:23 AM    <DIR>          .
2008/05/15  11:23 AM    <DIR>          ..
2008/05/15  11:23 AM                 7 file
               1 File(s)              7 bytes
               2 Dir(s)   4,698,382,336 bytes free

>c:\progs\perl588\bin\perl -e"system 'type file'"
test

>c:\progs\perl5100\bin\perl -e"system 'dir'"
 Volume in drive C is TRIBBLE05a
 Volume Serial Number is 28AB-0E8B

 Directory of C:\Documents and Settings\ikegami\test

2008/05/15  11:23 AM    <DIR>          .
2008/05/15  11:23 AM    <DIR>          ..
2008/05/15  11:23 AM                 7 file
               1 File(s)              7 bytes
               2 Dir(s)   4,698,382,336 bytes free

>c:\progs\perl5100\bin\perl -e"system 'type file'"
test
[download]

This is perl, v5.8.8 built for MSWin32-x86-multi-thread
Binary build 817 [257965] provided by ActiveState http://www.ActiveSta
+te.com

This is perl, v5.10.0 built for MSWin32-x86-multi-thread
Binary build 1001 [283495] provided by ActiveState http://www.ActiveSt
+ate.com
[download]

Update: I tried your program too. Worked fine. By the way, cmd is used for both type and dir even if you don't specify it explicitly since they're cmd builtins, not executables.