JAVA_HOME is a bit of a anticlimax. It simply tells you where Java is installed. Or at least the Java and Javac programs. Thats it! You must point to the bin directory of the Java install.
If Java is installed in C:\java\ then you would set it by -
Windows - SET JAVA_HOME=C:\java\bin
linux - export JAVA_HOME=/usr/java/bin
What is the difference between PATH and JAVA_HOME? Well PATH is used by a lot of different programs and is part of a standard install of your OS. JAVA_HOME is just to help java. Netbeans will make use of JAVA_HOME. If this variable is not set then some Java applications may not be aware of where to find it.