Hi Ben,
Please note that there is no such thing as a "child component". A Component consists of one or more resources (files, registry entries, shortcuts, data sources etc) which are treated by the installer as a single coherent piece (that is, if the Component is installed, all its resources are installed). You can read more
here.
Additionally, the "Permanent" and "Never Overwrite" attributes correspond to Components, not to resources (individual files). If you want all the files in a folder not to be removed on uninstall, you must set the "Permanent" attribute for the Component(s) attached to those files.
Use the "Go To Component", "Go To Resource" context-menu items (or press F8) to easily locate a Component/resource in the project. Use drag-and-drop in the Organization page in order to organize resources into Components appropriately.
Hope this helps.
Regards,
Ionut