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When selecting a user other than NETWORK SERVICE, the installer does not check or grant the selected user the "Log On As A Service" right, so the installation ALWAYS fails. It would be great if it could grant the selected user the right, or short of that, at least check and warn the installer if the user does not have the required permission beforehand.
It would be better to check if the user selected has sufficient rights ahead of time rather than letting the installation complete only to have the service fail to start.