The answer from Seki is mostly correct, I'd just like to add that the correct syntax for Exec/ExecWait is always Exec '"c:\path\app.exe" param1 "par am2" param3'
Parameters are of course optional but the path to the app should always be quoted, not just because in your case where $INSTDIR could contain spaces but at least on Win9x it will fail no matter what if you don't quote (According to the NSIS manual)
If the spaces/lack of quotes is not the issue then there are a couple of other things you might want to look into:
- $OUTDIR is the working directory for the new process (SetOutPath sets this)
- Missing dll's etc (Check with Process Monitor)