On WinMe, it looks like start/wait notepad.exe invokes start with the /wait option, but in Wine, it invokes start\wait.exe.
As far as I can tell, Wine's CreateProcess is exactly correct with respect to this issue and WinMe. The problem is in wcmd. wcmd's code is messy, the fix is probably nontrivial.
A minor complication: in WinXP, start is now built into wcmd instead of being standalone as in WinMe. As it happens, doing this would fix the present problem (i.e. start/wait not working) accidentally. Might be less painful than the real fix.
Who's the wcmd maven around here? - Dan