Vim expects to find its installation files (eg help system, definitions for syntax highlighting) in a particular place but can run without many of them. It's possible that while you can run Vim, it cannot locate these installation files.
Vim will try several methods to locate these files but if you have a unusual installation then they won't be found.
If you can access the help system, read these topics: :help $VIM and :help $VIMRUNTIME. You'll likely not find them with your current configuration, therefore read versions on the Web, eg :help $VIM and :help $VIMRUNTIME.
I suspect that you can solve your problem by correctly setting one or both of the VIM and VIMRUNTIME environment variables.
You might discover that the vim binary and runtime files exist in disparate directory trees and that you'll need to hunt for the runtime files below some path, eg: find /path -type d -name 'vim[0-9]*'
An Example
I rely on a Vim instance that is bundled with the Sun Studio development package, which our SysAdmin has provided via a remote mount. The vim binary is located at /remote/sunstudio12/SUNWspro/contrib/vim/bin/vim (eg which vim) and the runtime files are located in /remote/sunstudio12/SUNWspro/contrib/vim/share/vim/vim63.
I had a similar problem to yours. Firstly, I tried exporting VIM=/remote/sunstudio12/SUNWspro/contrib/vim, but that didn't work. Separately, I tried exporting VIMRUNTIME=/remote/sunstudio12/SUNWspro/contrib/vim/share/vim/vim63, which works correctly (while VIM remains unset). VIMRUNTIME should point to a directory containing files such as menu.vim, scripts.vim and directories such as colors, doc, syntax etc (possibly version-dependant, YMMV).
I also modified my PATH to locate the vim binary, however, you can successfully run the binary already.
/usr/share/vim/vim70/syntax/syntax.vimexist? If so, is it readable? – Jenny D Mar 15 at 10:27