Two folders in the Path environment variable that each contain EXE with same name, which one will run

The PATH variable doesn't ordinarily contain quotes; it uses semicolons as its delimiter. For example, here is my system's PATH definition, which includes folders with spaces:

%SystemRoot%\system32;%SystemRoot%;%SystemRoot%\System32\Wbem;%SYSTEMROOT%\System32\WindowsPowerShell\v1.0\;C:\Program Files\Microsoft Windows Performance Toolkit\

It seems that Windows can execute programs with "quoted" paths, but the DLL search routine can't handle them.

Ideally you should use:

set PATH=c:\app\bin;c:\app\runtime;%PATH%

Another workaround might be to launch the program from c:\app\runtime, eg:

cd /d C:\app\runtime
..\bin\app.exe

That may not even require modifying the PATH variable.

In short you can't. An environment variable is allowed to exist in a specific shell instance AND can be exported to sub-shells. But in no case can you export environment variables to the a more Parent shell and certainly not outside any inheartence chain of shells.

However, you can store entries in a file as you suggest and then import them manually by the '.' command in the event of SH derivatives or the source command by CSH derivatives.

I personally use tcsh for my interactive shell. If you were using that you could put an alias called cwdcmd that would execute a set of commands between each entered command. I use this facility to put the hostname, username, and current working directory in my command prompts. Using this facility you could put an include directive that would adjust your environment between each command prompt.