From perldoc on system:
"if LIST is an array with more than one value, starts the program given by the first element of the list with arguments given by the rest of the list."

I've never used system in this syntax (using the return value) but it looks like its just running the program "1" and passing everything else as an argument. Try this:

#!c:/Perl/bin/perl.exe
print "Content-type: text/html\n\n";
print "Created Installer 2: ";
system('c:\program\ie\makeinstall', '2');
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