How do I set the path to read lisp files? e.g. a lisp directory. The help files don't seem to me to be clear on how it is achieved.

Not sure if it's the best way, but I put them all in a general directory (C:\dwgs) which also contains all drawings (projects are all in subdirectories of this one). Then in Windows I set Icad to start in that directory (or folder).

You can go to Tools->Options
Select the "Paths/files" tab
add the path to the menus or drawings area