Error 1001 using custom installer with Visual Studio 2008

After many hours going around in circles I have finally found the problem and more importantly, the solution.

It should be possible to pass the parameters as "CustomActionData" as defined on this blog but the parameters are a little querky to say the least...

I found that the text parameters can't have quotes around the parameter name and should be formatted like this:

/Param1=[CONFIG_TESTFILE] /Param2=[CONFIG_TESTFOLDER]

In addition, to use the target directory parameter you need to include the quotes but instead of ending the field with a back slash, you must use a space instead, like this:

/target="[TARGETDIR] "

I had the same issue. In my case this blog helped: https://timgolisch.wordpress.com/2016/06/05/error-1001-exception-occurred-while-initalizing-the-installation/

Just to sum it up: check if your Output project Target .NET Framework version is matching with the Installer project Launch Condition .NET Framework version.