In my post here, I discussed a problem I'd run up against having to do with performing an ADMIN installation to a specific drive letter or network path, then unmapping that drive letter and remapping it to some other letter.
If you then attempt a client install, you'll get either at 1327 error (for mapped drives) or a 1606 error (if you used network UNC paths).
After further testing, it appears that the problem comes from assigning the TARGETDIR property to the AdminProperties property.
Some background:
The AdminProperties property is a ";" delimited list of property names that should be preserved when performing an admin install. The MSI engine stores those property values as they are at the time of the administrative install into the created Client Installation MSI (the MSI file that ends up in the admin install folder). Here's an example:

and a little closer in...

(Interesting bit of trivia: I have no idea how the MSI engine actually stores these properties in the MSI file, because opening the MSI file with ORCA, I couldn't find them anywhere. I'm guessing they're not stored as a normal table entry).
Normally, any properties you'd like to pass on to the client install (ie those collected via the User Interface during the Admin install), you would list as AdminProperties so the MSI engine will pass them on.
I had set the TARGETDIR property as an AdminProperty, because at one point, I believed it was necessary to preserve the path to the Admin installation, so the client installation could make use of it.
This turned out to be ill advised, however, because often, admin installations will be moved (for disk space reasons, reshuffling servers, etc), and preserving the TARGETDIR this way locked the Client install to always point back to the original administrative install. Instead, during a client install, I simply obtain the value of the current location of the MSI file (which, by necessity is the current location of the administrative install) and use it where needed.
At any rate, none of this should have mattered, because the documentation clearly states that the COSTFINALIZE MSI event checks the directory table for valid drive letters, not the Properties table.
However, directories stored in properties listed in the AdminProperties list are appearently special cases, and their validity is checked.
Moral of the story? Use InnoSetup
But, if ya gotta use InstallShield, make sure you do not:
- Store the Admin Installation folder or any folder that might end up getting remapped or disconnected, into a property during the Admin install.
- List that property in the AdminProperties property.
This goes for the TARGETDIR property (a common one), but also any other properties you might create.