Windows Installer and Windows Authentication
We just ran into this and thought I'd pass it along should it save someone some time.
We were seeing an issue where we were getting an error when we tried running a SQL Packager 5 EXE using Windows Authentication on a remote machine. When we ran it locally, it worked fine.
We looked into the issue and found that the custom action was set up as a "Deferred in the System Context" custom action type. We changed that to "Deferred", and it worked like a champ.