More options, more mess. The user will always do something funky, then don't remember about it and then complain to the software publisher that it's not working correctly
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I think it is very rude to just install to any "default" directory and not asks the user where he wants it to be installed.
I feel your pain as a developer but as a user, sometimes I need the choice. Try to hide it so non-techies people can click Next Next Next but put it in advanced options somewhere.