The InstallShield 2010 upgrade KB article (Q200330) contains this bit of information:
By the way all my installs have this setting as Traditional Windows Installer handling even though it states the Custom InstallShield handling should be default. Is this correct and if so why are mine all defaulting to Traditional?
Changes to Support for Securing Permissions for Files, Folders, and Registry Keys
The General Information view has a new Locked-Down Permissions setting that lets you specify whether you want to use the new custom InstallShield handling or the traditional Windows Installer handling for all new permissions that you set for files, folders, and registry keys in your project.... In all new projects, the default value for this setting is the custom InstallShield handling option. If you upgrade a project from InstallShield 2009 or earlier to InstallShield 2010, the traditional Windows Installer handling option is the default value of this setting.
The Windows Installer option is left as the default value in upgraded projects just in case you needed that behavior or you were somehow relying on it. You can easily switch to the new custom style once you've upgraded your project to InstallShield 2010.