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From WiX Wiki at MindCapers

Also see Summary of Custom Action Types at MSDN for an introduction to the types of custom actions availabe and their usage.

Type 1

A Type 1 custom action calls a DLL written in C or C++.

• MSDN Link about Type 1 Custom Actions

Type 2

A Type 2 custom action is calling an executable from a command line.

• MSDN Link about Type 2 Custom Actions
• CANotepadTest Example