Okay, here's some snippets from the MSI log file:
*** Admin (works):
MSI (s) (04:B8): Executing op: ActionStart(Name=AppendHOSTS,,)
Action 10:42:49: AppendHOSTS.
MSI (s) (04:B8): Executing op: CustomActionSchedule(Action=AppendHOSTS,ActionType=1025,Source=BinaryData,Target=f1,)
MSI (s) (04:B8): Creating MSIHANDLE (19) of type 790536 for thread 3768
1: Loading to Append C:\WINDOWS\System32\drivers\etc\hosts.
1: OpenFile succeeded.
1: Writing line: ###################################
1: Writing line: # CONTROL HOST FILE ADDITIONS BEGIN
1: Writing line: ###################################
1: Writing line: 00.00.00.00 server
1: Writing line: 00.00.00.00 server
1: Writing line: ###################################
1: Writing line: # CONTROL HOST FILE ADDITIONS END
1: Writing line: ###################################
1: Closing file.
MSI (s) (04:B8): Executing op: ActionStart(Name=CreateShortcuts,Description=Creating shortcuts,Template=Shortcut: )
Action 10:42:50: CreateShortcuts. Creating shortcuts
*** now here's the User (works, sortof)
MSI (s) (FC:F4): Executing op: ActionStart(Name=AppendHOSTS,,)
Action 10:46:18: AppendHOSTS.
MSI (s) (FC:F4): Executing op: CustomActionSchedule(Action=AppendHOSTS,ActionType=1025,Source=BinaryData,Target=f1,)
MSI (s) (FC:F4): Creating MSIHANDLE (7) of type 790536 for thread 3572
MSI (s) (FC:F4): Executing op: ActionStart(Name=CreateShortcuts,Description=Creating shortcuts,Template=Shortcut: )
Action 10:46:19: CreateShortcuts. Creating shortcuts
Now oddly enough, the user portion actually works during install. but for some reason it doesn't output the lines that I tell it to.