InstallAware

I believe this is a legitimate bug. I have a web media install in which several Altiris projects are being compressed into 7zip archives. These are reliably copied to our website and they are served up correctly. I found that the IA installer will not extract these projects at all.

In fact I went back to the build machine and opened the 7zip files with 7-zip version 4.65 file manager (from 7-zip.org), the archives cannot be extracted!
If I run a compression using the 7-zip file manager against the same files as the installer compresses, it too has the same problem.

Is there a file type that 7-zip is incapable of compressing?

There are very occasionally circumstances which causes the 7zip compression code to fail. You can try scaling back your compression to see if it helps with this; or alternately you may change the file set. Even adding new files with some different data can sometimes solve this problem in the compression engine.