I have heard that there is an issue with VS 2010 merge modules where they 
always install files to the Module Retargetable Folder instead of the intended 
one. That may have something to do wth it. Other issues may occurr when 
InstallUtilLib.dll is 32-bit and you attempt to use it on a 64-bit system. 

If there is any way you can re-build that merge module, you should do it. Even 
in the dubious world of using installer classes to install services you never 
needed to run InstallUtil.exe. The setup will call installer class custom 
actions without running InstallUtil.exe. There's nothing that special about 
.NET services, so if possible convert that merge module to WiX and use the 
built-in ServiceInstall elements that populate the ServiceInstall table in the 
MSI file. 

Phil

________________________________________
From: Aled Hughes [trestlemon...@gmail.com]
Sent: Wednesday, November 02, 2011 10:34 AM
To: wix-users@lists.sourceforge.net
Subject: [WiX-users] Error with InstallUtilLib.dll: CoreBindToRuntimeHost       
path not found error.

Hi, I have a merge module that was authored using the VisualStudio 2010
installer and this MSM installs a windows server and has a custom action
that registers the service using the InstallUtil program.
However, when I use that MSM in a MSI authored using WiX 3.5, I get the
following error on installation:

"Error 1001. InstallUtilLib.dll: CorBindToRuntimeHost (hr=0x80070003): The
system cannot find the path specified."

.Net4 is already installed on the machine.

When the MSM was included in a MSI authored using the VS2010 installer tool
the problem did not occur. I needed to move from the VS2010 installer to a
WiX installer to allow for more flexibility.

Any ideas as to what the cause of this is?
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