The value of this required directive is used for the default directory name, which is used in the Select Destination Location page of the wizard. Normally it is prefixed by a directory constant.
If UsePreviousAppDir is yes (the default) and Setup finds a previous version of the same application is already installed, it will substitute the default directory name with the directory selected previously.
DefaultDirName={sd}\MYPROG
In Setup, this would typically display:DefaultDirName={pf}\My Program
In Setup, this would typically display: