I am currently evaluating InstallAware 17 and I'm disappointed in the above response.
This is indeed a bug in InstallAware. After updating the system or user PATH environment variables, the installer MUST broadcast a message to all top level windows to inform them that system settings have changed. Sample Win32 API function call:
SendMessageTimeout(HWND_BROADCAST, WM_SETTINGCHANGE, 0, (LPARAM) "Environment", SMTO_ABORTIFHUNG, 5000, &dwReturnValue);
I would expect InstallAware to make this happen in an MSI automatically if any environment variables are changed. It doesn't.
QUICK WORKAROUND:
1. Install AutoHotKey (32-bit) -
http://www.autohotkey.com/.
2. Make a file called EnvUpdate.ahk. Put one line of text in the file:
EnvUpdate
3. Save.
4. Right-click the file, and choose Compile Script.
5. Install the resulting EnvUpdate.exe in your $TARGETDIR_X86$ (pick it in Files and Settings on the Design tab).
6. On the Project tab, in Run Programs, set the installer to run $TARGETDIR_X86$\EnvUpdate.exe at the Finish dialog.
Note: All new processes launched by explorer.exe will get the new environment. Existing processes will get the new environment if they are programmed to handle WM_SETTINGCHANGE correctly. To see this effect, open a command prompt before you run your installer, run the installer, then open another command prompt. In each prompt, type SET [Enter]. The new environment variable values will be set in the command prompt you opened after the installer, but not before.