I urge people not to expect that moving to InstallShield Developer is going to be an easy process. It has been a near nightmare for my company. I parcel the blame about equally to Microsoft and InstallShield, although some facts remain to be revealed. The strict rules and removal of useful options have resulted in a waste of hundreds of programming hours producing idiotic results. To me it is absolutely intuitive that a file with the same version number and an earlier time stamp should be replaced. Microsoft does not see it that way. Even after implementing automatically incrementing version numbers in the project, minor upgrades still do not overwrite two key .EXE files. IS tech support is working on this right now. Failed rollbacks have caused me to need to reformat a highly productive and customized development machine, as well as several tedious and dangerous registry sessions removing leftover shards of MSDE from failed installs.

Microsoft's support is far superior to InstallShield's through the simple
expedient of asking and caring whether the customer got a satisfactory result. InstallShield is far too willing to hurl a KB artcle at you and hope you go away. There have been exceptions, but successful troubleshooting by techs is in the minority.

Fortunately Microsoft has provided the merge modules with the SP3 service pack for MSDE 2000. Unfortunately they have yet to work as expected, providing this little bit of clue in a log file that you have to crawl through help files to figure out how to create:

Action start 16:59:11: SetServerRegKeyPrivileges.2D02443E_7002_4C0B_ABC9_EAB2C064397B.
MSI (s) (94:14): Creating MSIHANDLE (203) of type 790542 for thread 1300
SOFTWARE\Microsoft\Microsoft SQL Server Setup.{AB12402D-8E45-4C88-8B30-947B26B68D48}
TempFolder is D:\DOCUME~1\randy\LOCALS~1\Temp\{AB12402D-8E45-4C88-8B30-947B26B68D48}\
Loading extended custom action library D:\DOCUME~1\randy\LOCALS~1\Temp\{AB12402D-8E45-4C88-8B30-947B26B68D48}\sqlcax.dll
SOFTWARE\Microsoft\Microsoft SQL Server Setup.{AB12402D-8E45-4C88-8B30-947B26B68D48}
Error applying permissions to key
Action ended 16:59:12: SetServerRegKeyPrivileges.2D02443E_7002_4C0B_ABC9_EAB2C064397B. Return value 3.
Action ended 16:59:12: INSTALL. Return value 3.
MSI (s) (94:14): MainEngineThread is returning 1603
MSI (c) (78:0C): Back from server. Return value: 1603
MSI (c) (78:0C): Decrementing counter to disable shutdown. If counter >= 0, shutdown will be denied. Counter after decrement: -1
Action ended 16:59:12: ExecuteAction. Return value 3.
MSI (c) (78:0C): Doing action: SetupCompleteError

How can I have an "Error applying permissions to key" when I'm in the Administrators group.

My current tech seems to be patient and persistent, and I may be getting the needed result soon. Even if I do, there's no way that I can say that the product is easy to use or well designed. It just has found too many different ways to fail to deliver what is needed from it. And it very rarely points you to the correct remedial action with a concise and informative error message.