Thought I would post Amber's workaround for those of you who might be having the same issue.
After looking at the HummingBird MSI package, I found that this is a bug in Tuner. But the good news is that this bug_has been_fixed and will be available in our next upcoming release.
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After looking at AdminStudio 5.02 here is what you can do for a workaround. I don't know if you have heard of a tool called "Orca". If not search on Microsoft website and download this tool. Once you install this tool, you can open your MSI package in ORCA. Now go to Directory table and search for "INSTALLDIR", When you find this record in the Directory table, go to the last column "DefaultDir" and replace "." with some other text maybe "Test" (I called it "TunerBug").
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Now save the MSI package and then try to create the response transform. You will find no problems and your response transform will be created successfully. But now something very important, once your transform is created open it in Tuner and go to the "Product Properties" node and change the Default Destination Path back to "ProgramFilesFolder". This will reset your "INSTALLDIR" back to the original value.
It worked for me. I just wish InstallShield would release a "Value Pack" to fix this and all other known issues. Is Admin Studio 5.5 incapable of standing on its own (new features?) that they must force you to upgrade to fix this and other such issues?
Just a note, Amber did an excellent job in getting me an answer and she got it quick! I have nothing but praise for her!
Bryan