Okay, I have decided the only way I can do what I want to do with WiX (thanks to an old installer I didn't write that I now have to upgrade) is with some CUSTOM ACTIONS.

Basically, I need to back up a file before the RemoveExistingProducts and restore that file again after RemoveExistingProducts. I think this is what's called a "type 2 custom action."

The sequencing I think I understand, however, what I don't understand is first of all how I pass data to my C# action (the directory the file is in from the WiX) and how to reference my C# (DTF?) action with the Binary and CustomAction tags.

Also, does all this need to be in a tag? All the examples show it that way.

Here is what I have so far in the .WXS file...

<Binary Id="backupSettingsAction.dll" 
            SourceFile="backupSettingsAction.CA.dll"/>
    <CustomAction
              Id="BackupSettingsAction"
              BinaryKey="backupSettingsAction.dll"
              DllEntry="CustomAction" 
              Execute="immediate" />

    <InstallExecuteSequence>
        <Custom Action="backupSettingsAction.dll" Before="InstallInitialize"/>
        <RemoveExistingProducts After="InstallFinalize" />
        <Custom Action="restoreSettingsAction.dll" After="RemoveExistingFiles"/>
    </InstallExecuteSequence>

The file I need to back up is a settings file from the previous install (which needs to remain intact), it is located in the directory:

<Directory Id="CommonAppDataFolder" Name="CommonAppData">
            <Directory Id="CommonAppDataPathways" Name="Pathways" />
        </Directory>

And even has a Component tag for it, though I need to back the file up that exists already:

<Component Id="Settings" Guid="A3513208-4F12-4496-B609-197812B4A953" NeverOverwrite="yes" >
    <File Id="settingsXml" ShortName="SETTINGS.XML" Name="Settings.xml" DiskId="1" Source="\\fileserver\Release\Pathways\Dependencies\Settings\settings.xml" Vital="yes" />
</Component>

And this is referencing the C# file that Visual Studio (2005) created for me:

namespace backupSettingsAction
{
    public class CustomActions
    {
        [CustomAction]
        public static ActionResult CustomAction1(Session session)
        {
            session.Log("backing up settings file");

            //do I hardcode the directory and name of the file in here, or can I pass them in?

            return ActionResult.Success;
        }
    }
}

Any help is greatly apprecaited. Thank you!