I need to monitor and report on all changes (folders and directories added, permissions changed, registry entries added) that are made during the installation of a software
Note: Please see my other answer below as well.
Seeing as you want to create a Wix setup, I want to add a new answer with some hints on how to accomplish this in the quickest way.
I would recommend using the InstallRite (no longer available) software to get a log of changes done by the installer you got. This tool does not allow you to convert the capture into an MSI, but it gives you a good change log (which does contain a bit of junk). The PictureTaker tool appears to have been renamed and is now commercial - it does allow conversion of the capture to MSI though.
There seems to be a new capture tool called Scalable Smart Packager CE (link removed Nov, 2017 - target site has changed and looks a little suspicious). I have not tested this tool thoroughly.
Once you have your log or capture, you can convert to WIX in 2 "fast track" ways:
If you use the dark.exe tool you should get a complete WIX XML file that you can then compile again - but you should clean it up a bit (take out the UI junk, then link with WIX's detault built-in GUI etc...).
Using heat.exe is the cleaner way. You simply run the heat.exe tool against a folder, and it will create WIX XML elements for you to install those files. You will then need to put it all together in a WIX source files along with other required sections. I can provide you with a basic WIX "minimal sample" to get you going (I don't seem to be able to attach files here).