<p>I would like to append a path to the PATH environment variable in a Visual Studio 2005 deployment project.  How does one do this?</p>

You need to add a row to the Environment Table of the MSI file to do this.  You can find information on that table here,
http://msdn.microsoft.com/en-us/library/aa368369(VS.85).aspx
.  You can use Orca to do this or automate the procedure with some VB Script.  The platform SDK contains the VB script file, WiRunSQL.vbs that can you used to automate build actions for your program.