I am using WiX 3.5.1930 in Visual Studio 2010, targeting the .NET Framework 3.5. (Later weekly builds of WiX seem to be very broken with respect to their custom action temp
If you create your custom action in Visual Studio (Votive) be sure that you created a Wix Custon Action project and not a class library, otherwise you have to use MakeSfxCA tool to pack your custom action.