I went and poked around on Windows with 2.5. The “path does not work” is just a small problem (we don’t add the “.exe” on Windows so we test the wrong path). Regardless, with the path set to the right folder, it should work anyway.
Even so, it’s broken… We produce the correct command line, spaces and all, it runs correctly if run from the command line. However, when we try to run it using PHP’s proc_open function, it doesn’t work, complaining that the file syntax is wrong. The problem seems to have to do with how PHP executes commands on Windows and how it tries to work around Windows’ strange quoting rules. I have a workaround that seems to work but I’m not sure if it has other negative effects.
For you the best and simplest option is probably for the time being to just switch the strategy to not use ImageMagick. The GD strategy generally works most easily as the necessary library is usually preinstalled along with PHP. You’d make this change by adding the following line to application/config/config.ini:
fileDerivatives.strategy = "Omeka_File_Derivative_Strategy_GD"