I have a solution where the executable's target platform was initially set to x86, many other projects were set to AnyCPU, and included 3 projects in .Net 3.5 (everything else .Net 4.0). I presume this is why the installer wrote to the HKEY_LOCAL_MACHINE\SOFTWARE registry key. 
Recently, I fixed some issues and now all projects are .Net 4.0. Additionally, I set the executable target platform to AnyCPU. I found the application was now installed in HKEY_LOCAL_MACHINE\SOFTWARE\Wow6432Node.  
[sidebar - we have p/invokes -
DllImportattributes - that did not specify aCallingConvention. When this was modified both in managed and unmanaged code to specifiyCdecland__cdecl, we were able to upgrade dependent projects to .Net 4.0 without receiving aPInvokeStackImbalanceexception.]
We develop currently with VS2010 on Windows 7 (64-bit) machines.
My question is: Did the installer write to \SOFTWARE\ initially because some of the projects were .Net 3.5?
Also, if this application is intended to be installed on WindowsXP (32-bit is expected to be supported) machines, is the registry key problematic? Better yet, what should I look for in build options that ensures compatibility on WinXp 32-bit systems?