Recently, after you create your application (web or windows app) in VS .Net 2008 / 2010 of course you create your setup project / click once deployment for better distribution of your application. But we will found a problem if we want to include .Net Framework 3.5 SP1 as our prerequisites in the same directory as the application. You will found error message like this one : “The install location for prerequisites has not been set to ‘component vendor’s web site’ and the file ‘DotNetFX35SP1\dotNetFX20\netfx20a_x86.msi’ in item ‘.NET Framework 3.5 SP1‘ can not be located on disk.”. Well, it’s because by default, .Net Framework 3.5 SP1 will be download from Microsoft Download Center website due to size restrictions.
The question is, how we include .Net Framework 3.5 SP1 in our installation package? well, Microsoft has provided way to doing this. You can find the full instruction in Visual Studio 2008 Service Pack 1 Readme.