1. After reading your posting, I think you are using "Create Response transform" approach. Are you able to successfully create a blank transform, make changes and then run the installation?
2. Are you able to open the mst file that is created in the project directory of Palm Desktop?
3. What is the error message that you get when you try to run the installation after applying the transform?
Can you also please mail me the Palm Desktop 4.1 msi package you are using to create the transform. I will try to reproduce the problem and get back to you asap.
ambera@installshield.com