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How to create setup project using executable file, some default folders in executable file folder, dll, activex controls (register these controls) in visual studio 2005, windows 7 OS environment.

how to deploy the setup project in windows 7
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Many projects don't really need installation (and I really appreciate if they don't have any), but in your case you really need some.

I would strongly recommend open-source WiX:
http://en.wikipedia.org/wiki/WiX[^],
http://wixtoolset.org/[^].

In my opinion, it's most important benefit is the perfect conformance to MSBuild technology and nice integration with Visual Studio. From this point of view, old "Setup project" template which comes with Visual Studio is almost illegal. I recently switched to WiX in our company, in part because Visual Studio 2012 does not support the old setup project types (I hope, for good reason).

—SA
 
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