That's what it should look like, if you want it to go to c:\winnt\temp. I would guess that whatever action is copying those files is using the environment variable %temp% instead of the MSI property [tempfolder].
How are you copying the files you want in the system temp folder? With an embedded script in a custom action? If so, you may have to re-evaluate how you're populating those files, and perhaps switch them over to using the native windows installer file copying methods.
For instance, if you're using the tables, you should be able to go to the component table, find the file (or files) that you want copied, and simply change the entry in the Directory_ column to read "TempFolder". That will tell Windows Installer to put that particular file in c:\windows\temp.