I'm using the latest qvm, and it does find it.
tremulous 1.1.0 win_mingw-x86 Aug 27 2006
----- FS_Startup -----
Current search path:
N:\Tremulous\base\vms-1.1.0.pk3 (4 files)
N:\Tremulous\base\map-uncreation-1.1.0.pk3 (110 files)
N:\Tremulous\base\map-tremor-1.1.0.pk3 (45 files)
N:\Tremulous\base\map-transit-1.1.0.pk3 (135 files)
N:\Tremulous\base\map-niveus-1.1.0.pk3 (134 files)
N:\Tremulous\base\map-nexus6-1.1.0.pk3 (151 files)
N:\Tremulous\base\map-karith-1.1.0.pk3 (118 files)
N:\Tremulous\base\map-atcs-1.1.0.pk3 (87 files)
N:\Tremulous\base\map-arachnid2-1.1.0.pk3 (67 files)
N:\Tremulous\base\data-1.1.0.pk3 (1229 files)
N:\Tremulous/base
----------------------
2080 files in pk3 files
execing default.cfg
execing autogen.cfg
couldn't exec autoexec.cfg
Hunk_Clear: reset the hunk ok
...detecting CPU, found generic
------- Input Initialization -------
No window for DirectInput mouse init, delaying
Joystick is not active.
------------------------------------
--- Common Initialization Complete ---
WinHitch warning: 2319 msec frame time
sock Initialized
Opening IP socket: localhost:30720
Hostname: LIB00540.graveney.wandsworth.sch.uk
IP: 10.100.4.224
Working directory: N:\Tremulous
execing server.cfg
------ Server Initialization ------
Server: niveus
Hunk_Clear: reset the hunk ok
----- FS_Startup -----
Current search path:
N:\Tremulous\base\vms-1.1.0.pk3 (4 files)
N:\Tremulous\base\map-uncreation-1.1.0.pk3 (110 files)
N:\Tremulous\base\map-tremor-1.1.0.pk3 (45 files)
N:\Tremulous\base\map-transit-1.1.0.pk3 (135 files)
N:\Tremulous\base\map-niveus-1.1.0.pk3 (134 files)
N:\Tremulous\base\map-nexus6-1.1.0.pk3 (151 files)
N:\Tremulous\base\map-karith-1.1.0.pk3 (118 files)
N:\Tremulous\base\map-atcs-1.1.0.pk3 (87 files)
N:\Tremulous\base\map-arachnid2-1.1.0.pk3 (67 files)
N:\Tremulous\base\data-1.1.0.pk3 (1229 files)
N:\Tremulous/base
----------------------
4160 files in pk3 files
Loading vm file vm/game.qvm...
...which has vmMagic VM_MAGIC_VER2
Loading 746 jump table targets
VM file game compiled to 1041421 bytes of code
game loaded in 8928512 bytes on the hunk
------- Game Initialization -------
gamename: base
gamedate: Mar 27 2006
------------------------------------------------------------
InitGame: \g_maxGameClients\0\g_suddenDeathTime\55\sv_maxPing\0\sv_minPing\0\sv_maxRate\15000\sv_minRate\5000\sv_maxclients\24\sv_hostname\Alex's local server.\timelimit\60\version\tremulous 1.1.0 win_mingw-x86 Aug 27 2006\protocol\69\mapname\niveus\sv_privateClients\0\sv_allowDownload\0\g_needpass\0\gamename\base
********************
ERROR: G_ParseSpawnVars: found 5 when expecting {
********************
----- Server Shutdown (Server crashed: G_ParseSpawnVars: found 5 when expecting {) -----
Resolving master.tremulous.net
master.tremulous.net resolved to 65.98.84.18:30710
Sending heartbeat to master.tremulous.net
Sending heartbeat to master.tremulous.net
==== ShutdownGame ====
ShutdownGame:
------------------------------------------------------------
---------------------------
Hunk_Clear: reset the hunk ok
Hitch warning: 21822369 msec frame time
Hitch warning: 8255 msec frame time
Hitch warning: 3929 msec frame time
Note the bit above the error?
I can only modify things on N:\, due to exceedingly strict computer policies. :/

Can't acess internal drives, can't use cmd, can't type locations in explorer.
It sucks.
However, with +set fs_homepath N:\Tremulous, it searches in N:\Tremulous instead of C:\Documents And Settings\blahblah.
So why's it not working? ._.