Hi Satish,
The two articles my reply links to were sufficient to resolve the problem for me. I'm sorry, but I can't be of much help on this one. For one thing, I'm still working with InstallShield 2008 Express. For another, I don't recall anything about the Property Manager, and I don't see any settings in my project similar to the "IISPREFERLEGACYOBJECTS = 1" referred to apriltioe.
I can't remember off the top of my head how to create the failure log. It involved a command line switch, perhaps "/f." I learned how to do it reading the InstallShield forums. I think the search terms I used were "failure log."