I ran into the same problem on Windows Server. If anyone else is having difficulty with this, I solved the problem by adding the Subversion program directory to my PATH. So your post-commit.bat would include these lines:
SET REPO=%1
SET REV=%2
SET PATH=C:\Perl\bin;C:\Program Files\CollabNet Subversion Server;
SET OS=Windows_NT
SET SystemRoot=C:\WINDOWS
svnnotify --repos-path %REPO% --revision %REV% --to <to-email> --smtp <smtp-server> <options>