BUG #3083: Installation to path with umlaufs fails with initdb

The following bug has been logged online:

Bug reference: 3083
Logged by:
Email address: ferdinand(dot)wess(at)onevision(dot)com
PostgreSQL version: 8.2
Operating system: Windows 2000
Description: Installation to path with umlaufs fails with initdb
Details:

Install Postgres to a path like "c:\a" including database initialization
works perfectly.
(Locale = C; Encoding = UTF8, though this parameters seem not to be relevant
for the problem.)
Install it to a path like "c:\" the installation fails when it comes to
run initdb creating the database at "c:\\data"

An error messages appears "Failed to run initdb: 1!"
It refers to a log "c:\\tmp\initdb.log"
However this log file is not created. (And yes, I looked in that folder
before closing the message :-)).

First I suspected that the problem is in initdb itself,
however, initdb running from a command shell using a database path with
umlauts works.
Furthermore, having a firewall running, the firewall asks me for running
initdb when installing with a GOOD path.
This question doesn't come up with the BAD path. Therefore I think the
problems is in the MSI installer itself when trying to call initdb, i.e.
initdb is never launched, therfore also no log file is ever created.