What would cause "python.exe" to work while "python" fails in Windows command prompt? -

i using python 2.7.2 on windows 7 machine, , have been setting path variable in command prompt each time want access python. today, noticed behavior changes if append directory front of of path variable.

on opening command prompt, recognizes neither python or python.exe:

microsoft windows [version 6.1.7601] copyright (c) 2009 microsoft corporation.  rights reserved.  c:\users\z1083743>python system cannot find path specified.  c:\users\z1083743>python.exe 'python.exe' not recognized internal or external command, operable program or batch file. 

when add python binary directory onto of path, recognizes 1 not other:

c:\users\z1083743>set path=%path%;c:\fuel\std-1.4.10.1\windows-x64-vs10.0\python-2.7.2\bin  c:\users\z1083743>python system cannot find path specified.  c:\users\z1083743>python.exe python 2.7.2 (default, jun 12 2011, 14:24:46) [msc v.1500 64 bit (amd64)] on win32 type "help", "copyright", "credits" or "license" more information. >>> ^z 

if add python binary directory on front of path, recognizes both:

c:\users\z1083743>set path=c:\fuel\std-1.4.10.1\windows-x64-vs10.0\python-2.7.2\bin;%path%  c:\users\z1083743>python python 2.7.2 (default, jun 12 2011, 14:24:46) [msc v.1500 64 bit (amd64)] on win32 type "help", "copyright", "credits" or "license" more information. >>> ^z   c:\users\z1083743>python.exe python 2.7.2 (default, jun 12 2011, 14:24:46) [msc v.1500 64 bit (amd64)] on win32 type "help", "copyright", "credits" or "license" more information. >>> ^z 

i've read through of answers adding-python-path-on-windows-7 question, of them aimed @ getting working. far can tell, none of them describe behavior i'm seeing.

what's happening here? why need .exe extension in 1 case , not other?