My system crashed (actually LiteStep crashed), so I had to reboot. After rebooting, quoted and unquoted taskkill.exe without the full path works.

My system is a laptop, and I usually suspend or hibernate many times between reboots, and after a while Litestep starts losing system tray icons (usually the volume control, sometimes my wireless network indicator), so there seems to be a memory leak somewhere. I guess these memory leaks may affect Litestep's environment too.

I'll stick with a quoted full path to taskkill since it worked when the other variations didn't.

Thank you jugg and DeViLbOi for your help.