We have an issue with some msi-installers (Firefox, Google Chat) running on a system with Folder Redirection enabled. We set UNC path to Computer\HKEY_CURRENT_USER\Software\Microsoft\Windows\CurrentVersion\Explorer\User Shell Folders\AppData variable. Installation fails with error "Failed to Create AppData Cache Folder".
We found that these installers work fine with Windows Installer V 5.0.17763.404 and fail with Windows Installer. V 5.0.19041.1. We found out that new version of Windows Installer tries to set special permission on the folder ...\AppData\Roaming\Microsoft\Installer. It seems that it has troubles to access remote ...\Microsoft\Installer directory in general.