The default install of gs854w32-gpl.exe on a fresh windows is broken. The default path it uses for GS_LIB is C:\gs\gs8.54\lib because the registry key it installs for GS_LIB is not the same registry key it searches for GS_LIB. AND, C:\gs\gs8.54\lib does not exist because the default installation folder is C:\Program Files\gs\gs8.54\lib I'm going to write this as two bugs because I think this needs to be fixed in two different places. This is the bug in the setup routine. I suppose it's the setupgs.exe inside of gs854w32-gpl.exe that creates this registry key: [HKEY_LOCAL_MACHINE\SOFTWARE\AFPL Ghostscript] instead of: [HKEY_LOCAL_MACHINE\SOFTWARE\GPL Ghostscript] gswin32c.exe does not find the GS_LIB registry value if it's in the [HKEY_LOCAL_MACHINE\SOFTWARE\AFPL Ghostscript] but it does find it in the [HKEY_LOCAL_MACHINE\SOFTWARE\GPL Ghostscript] However, with the default install of gs854w32-gpl.exe there is no [HKEY_LOCAL_MACHINE\SOFTWARE\GPL Ghostscript] for gswin32c.exe to find. This combined with the fact that the last resort GS_LIB path hardcoded into the .EXE and .DLL doesn't exist results in a default install being broken from the command line.
here is the other bug I promised for the last resort path (GS_LIB_DEFAULT?) for GS_LIB hardcoded into gswin32.exe; gswin32c.exe and gsdll32.dll not being in harmony with the default install path: see bug 688832 The combination of these two bugs means a default install on a fresh copy of WindowsXP is broken from the command line. Fixing either one would make it work again, but I think they both deserve to be fixed.
I meant to include the error I see: C:\Program Files\gs\gs8.54\bin>gswin32c.exe GPL Ghostscript 8.54: Can't find initialization file gs_init.ps.
Russell Lang did a new build which should fix this. Assigning to him for confirmation. Russell, please close when you've committed the changes to SVN.