Would you consider adding to the "Archive installation files into CAB files" on the Media Tab an option which would put only MergeModules into a CAB, while still allowing all other files to be placed unpacked next to the MSI file? (I have an extra 70 MB in the MSI file just because of the amount of MergeModules)
Please note that this is already the behavior when selecting "Place files unpacked in folders next to the MSI database". When this option is checked, your files are placed next to the MSI file while the merge modules remain in the MSI.
The files in the MergeModules get packed into the MSI.
What I am asking for is that they get packed into a CAB instead, as an option.
When I used the VS .NET Installer, I selected the option to use CAB files and the MergeModules got packed into the CAB (while still allowing the other non-MergeModule files to be left unpacked).