Many WiX elements take a condition as the inner text. Since it's XML you'll frequently need to escape special characters. Here's a pointer to how the conditions work:
Conditional Statement Syntax
Also, I'm not sure why you have INSTALLDIR1 and INSTALLDIR2. Without seeing the rest of your code I'd have to say you aren't going about it correctly. You should have one INSTALLDIR and then set it to different locations depending on per user or per machine. Here's a good blog article on the subject:
Authoring a single package for Per-User or Per-Machine Installation context in Windows 7
Personally, I rarely bother with per-user installations. They are a pain with little value other then 'viral' (not a virus, but spread through social media to non priv users ) applications.