If you are on a Windows machine, it might be that the rtrace being found through the PATH is from Daysim and not the NREL version. The where command will tell you which rtrace is being called.
If you re-arrange the order of the paths such that the latest NREL installation path is before all the other Radiance installation paths, I think it should work out.
You can also set the path manually before typing in any Radiance commands (this will work for batch files too):
SET RAYPATH=.;C:\Radiance\lib
PATH=C:\Radiance\bin;$PATH