I am very new to this app and I am just trying to get the installer to honor the install path that is typed in by the user (rather than the location specified in the files and folders section).
The Application Folder (represented by the TARGETDIR property), is the location where the files and folders of the application should be placed. It's default value can be specified in the "Files and Folders" tab. This location (property) is the one that can be changed by the user in the "Select Location" dialog.
Creating in the "Files and Folders" tab subdirectories for the "Program Files" folder and placing your application files there is the wrong approach as it will hardcode the install location and the user will not be able to change it during setup.
Similarly, the shortcuts for the application should be placed in the Application Shortcut Folder, who's default location can be also specified in the "Files and Folders" tab.