Maybe it's just not finding the Paintball2 install directory in the registry. Did you actually install Paintball2 from the installer?
In bsp/pball2/quake2/pball/compilers, do you have a runmap.bat? If so, open it in notepad and remove the first "@echo off" line and run it again and see if it has any extra info. Do you have HKCU\SOFTWARE\Digital Paint\Paintball2 in your registry with an INSTDIR key?
Also, what version of Windows are you running?