Hi I managed to get this working myself , so if anyone else is having the same issue , i fixed this by modifying my web.config during my install:
To do this i added the following code to my product.wsx to edit my web.config , using properties which i assigned to text boxes in a new dialog to allow the user to enter the impersonation username and password on install :
<Component Id="Web.config" Guid="2ED81B77-F153-4003-9006-4770D789D4B6">
<File Id="Web.config" Name="Web.config" Source="$(var.SolutionDir)MyWebApp\Web.config" DiskId="1" KeyPath="yes" />
<util:XmlFile Id="system.webidentity" File="[INSTALLLOCATION]Web.config" Action="createElement" ElementPath="/configuration/system.web" Name="identity" Sequence="1" />
<util:XmlFile Id="system.webIdentityAttribute" Action="setValue" File="[INSTALLLOCATION]Web.config" ElementPath="/configuration/system.web/identity" Name="impersonate" Value="true" Sequence="2" />
<util:XmlFile Id="system.webIdentityAttribute2" Action="setValue" File="[INSTALLLOCATION]Web.config" ElementPath="/configuration/system.web/identity" Name="password" Value="[IMPERSONATIONUSERPASSWORD]" Sequence="3" />
<util:XmlFile Id="system.webIdentityAttribute3" Action="setValue" File="[INSTALLLOCATION]Web.config" ElementPath="/configuration/system.web/identity" Name="userName" Value="[IMPERSONATIONUSER]" Sequence="4" />
Note if you are adding your files automatically to your Wix project using msbuild and heat , you'll have to ensure you arent copying your web.config here , or if you are , remove my web.config your Target settings. Otherwise you'll get duplication errors .
<Target Name="BeforeBuild">
<MSBuild Projects="%(ProjectReference.FullPath)" Targets="Package" Properties="Configuration=$(Configuration);Platform=AnyCPU" Condition="'%(ProjectReference.PackageThisProject)'=='True'" />
<Delete Files="%(ProjectReference.RootDir)%(ProjectReference.Directory)obj\$(Configuration)\Package\PackageTmp\web.config">
</Delete>
<PropertyGroup>
<LinkerBaseInputPaths>%(ProjectReference.RootDir)%(ProjectReference.Directory)obj\$(Configuration)\Package\PackageTmp\</LinkerBaseInputPaths>
</PropertyGroup>
<HeatDirectory OutputFile="%(ProjectReference.Filename).wxs" Directory="%(ProjectReference.RootDir)%(ProjectReference.Directory)obj\$(Configuration)\Package\PackageTmp\" DirectoryRefId="INSTALLLOCATION" ComponentGroupName="%(ProjectReference.Filename)_Project" SuppressCom="true" SuppressFragments="true" SuppressRegistry="true" SuppressRootDirectory="true" AutoGenerateGuids="false" GenerateGuidsNow="true" ToolPath="$(WixToolPath)" Condition="'%(ProjectReference.PackageThisProject)'=='True'" /> </Target>