I don't think this is the problem. I looked through the msm files all the way back to SP 1 and the registry notation is the same. Always. And I know it works in VS .NET, InstallShield and Wise. I also don't think double slash is bad. Not according to this:
I think going to WIX and asking them to support their software by coming here and asking the questions rather than you doing their work will be the way to go.
- Ludek