You might be able to use a progress bar type behavior. That is supported within Windows Installer. We have a custom action that can take a long time to finish. We added progress bar "ticks" to the custom action that provide feed back to the UI. Might be worth checking out. Though you need to specify a "range" and then provide ticks to indicate progress. Not sure how that would work in an open ended type transaction. In our case we have hundreds of files to process, so we use the number of files as the "range" and send a tick message after we process each file.
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