Just a small correction to Mark's post. The "s" must be lower case. This is from the help:

In the command line, you can use an embedded %s sequence to replace the application directory. The “s” must be lowercase. Use the %s sequence when you install files in application subdirectories.

>you also specify what the command line is. If you identify it as %S\MYEXE.EXE instead of C:\SomeDirectory\MYEXE.EXE you should eliminate the problem you are seeing.