Sorry, I should have been more specific on the error:

cpan> test XML::SemanticDiff
...
Running make test 'E:\Program' is not recognized as an internal or external command, operable program or batch file. E:\Program Files\Microsoft Visual Studio\VC98\bin\nmake.exe test -- NOT OK

I already checked the Environment Vars and they are correct.
It seems to be a problem with the spaces (at least to me) based on the 'E:\Program' part of the error message.
I checked the config using: cpan> o conf make
and I get the correct path and file name.

<scratch head>