>FYI InstallShield says to put in the backslash...

Only to separate sub-folder names. You do not need a backslash after [INSTALLDIR], which is a Windows Installer property name. Inserting the backslash after [INSTALLDIR] used to cause problems, although it may not cause problems in the newer versions of InstallShield Express.

>The problem was in my exe. As part of my upgrade process, I was renaming another exe ( that was included in InstallShield ) before running it. So the second time I tried to run the exe, something that InstallShield did to the environment tried to re-install the file that I had renamed.

I still think you may have an advertised shortcut. One feature of advertised shortcuts is they attempt to repair the application if they detect that a component is 'broken' (missing or changed file, for example) when the application is launched.