Is it possible to design the custom dialog in the following manner.
All the steps in left side and process for each step in right side ( similar as SQL Server Installation Step, Attached the image)
Please give your suggestions.
Thanks in Advance.
That likely isn't a custom dialog - that is likely an external UI. The external UI can watch for the messages and update the UI accordingly.
Most of the Microsoft products these days are not using InstallShield, but are using their own freeware product called WiX. Have you looked into it?
In there you can find a tool called Burn that lets a person author a bootstrapper or Bundle as they call it.
Since an MSI is just a Database at heart, XML works great for an authoring language for MSI.