$Path gives the default list of directories to search in attempting to find an external file.
The structure of directory and file names may differ from one computer system to another.
$Path is used both for files in Get and for external programs in Install.
The setting for $Path can be overridden in specific functions using the Path option.
The directory names are specified by strings. The full file names tested are of the form ToFileName[directory,name].
On most computer systems, the following special characters can be used in directory names:
$Path can contain nested sublists.
See The Mathematica Book: Section 1.11.2 and Section 2.11.4.
See also: Path, Directory, SetDirectory, Get, DirectoryName, $Input.