How do I change my env variables like color and MAIL=/var/spool/usersname/mail to MAIl=~/mail
and other changes and in what file

Please also tell me how to change the HOME so that I can log in to my X using two or more different sets of settings

You can make some changes such as the value of MAIL in your ~/.bash_profile or ~/.profile script depending on which you prefer to use. This assumes you use the bash shell as your default. You can also use the ~/.bashrc script to do this. For some things, like 'PATH=$PATH:/another/path/' is is better to use ./.bash_profile or ~/.profile and not ~/.bashrc so that the script is only run once when you login.

The HOME variable contains which home directory you use. It is determined from the /etc/passwd file when you login. You might be thinking of profiles instead, which your distro may support. I don't really understand what you want to do in the second part of your second question. You could create a second user who would have different settings. You may have desktop settings different, which are saved in ~/.kde/ for the kde desktop.
Some applications allow using different profiles. Such as firefox or konqueror. You could have a common Documents partition or directory that is linked to by the Documents folder of more than one user, and use group access so that you have the same Documents directory regardless of which of your own usernames you log into.

the second part actually is asked because I am allowed only one account

What types of settings are you talking about?

Do you log into the console and then execute "startx"?

I don't know if the HOME variable is read by kde or gnome to determine your home directory. It might be an interesting experiment to:

1. Create a directory in your home directory (i.e. ~/home/home2)
2. Copy needed files and directories there: (i.e. cp -R ~/.bashrc ~/.profile .xinitrc ~/Desktop ~/home/home2
3. log out of kde.
4. run "HOME=$HOME/home2 startx"

If anything uses /etc/passwd to determine your home directory, then things may break down fast.