vmaruv,
There were a few different combinations of hacks I used to use to get the thing to work. The main issue I had was similar to yours--it would keep saying it needs to install some newer versions and you'd need to reboot, but then the same message would come back. In these instances it seemed to be mscal.ocx that was the problem. But in a few, vb6stkit wasn't on the target machine. So first I'd try putting that line back in (or re-running p&d). Then copy your vb6stkit.dll to the target machine in the winsys directory.
Then, if setup.exe runs fine but the new target .exe file doesn't run, then you need to check each file in the
[Setup1 Files] section and make sure they exist on the target and manually register them (via regsvr32). I've not used VSI so I can't comment on that.
If the issue is while running setup.exe, then just remove one file at a time from the [Setup1 Files] section until the problem goes away, then you'll know the problem file, and you can just put back all the other lines and leave that one out, and manually register that .dll. In the past, I've had to actually run the third-party setup.exe for some of the dll's I'd included, for instance True DBGrid seemed to be a real pain to get to work via P&D--I often had to put a copy of the True DBGrid on our install CD and run it on the client machine. It kinda defeats the purpose of P&D wizard, but it was the only way we could get the things to work, prior to us getting Wise (double-entendre intended).
--Troy