Could be just to get updates I suppose
I would imagine it's probably just a reference, maybe it's unique to 2010 or VB.NET because I got curious and checked some of my C# applications and none of them have anything like that inside them (perhaps I'm just more diligent with my references?
Regarding the application key; it actually doesn't work so well. I cannot remember the specific instance or why I needed it but I tried to monitor that key to do something similar (detect changes to a environment variable) and it didn't work at all; this is because that particular key only determines the (as you noted) System path; it will have no effect on the User's Path variable (which is to say, it will (I believe) change the path for applications run as the administrator (in Vista and 7), but those that aren't neither have access to that key nor have an environment block that contains values from that key... unless the "notification" program mirrors those values into the corresponding location in CURRENT_USER.
I think a more useful course of action might be for Geek to actually post his Path setting so we can see exactly what he is referring to. My %path% has 69 folders, and certainly could have a lot of folders removed from it; even those that do exist (I do quite like the idea of checking the path variable for non-existent folders).
Building a utility to "protect" the path seems pretty redundant, though. It would probably be more annoying in the long run, and it seems like overkill. If one is going to "protect" t he Path variable, why not any number of other various system variables?