The percent signs indicate that they are environment variables that are to be expanded. You can see these in action by starting up a Command Prompt (CMD.EXE). Type the SET command and you'll see all the currently defined environment variables for your account.
On the machine I am using right now, HOMEDRIVE and HOMEPATH are the following according to the SET command:
HOMEPATH=Documents and Settingsjohn
To show it using the expanded environment variables, enter the following command in the Command Prompt window:
This is the equivalent of typing on my machine:
dir "e:Documents and Settingsjohn"
This was first published in December 2002