If you are receiving a rather cryptic ERROR: Unrecoverable build error when you are building your msi deployment files don't worry. There is a very very simple solution. Enjoy!
Apparently, no files can be open when you are building an installer. You can save all, and do whatever you want but you MUST have everything closed when you go to build. This doesn't include web services they will be included in the installer just fine if they are open. However, I stress once again to build a web setup project - that is making the installer for a web app - ALL FILES MUST BE CLOSED.