InstallAware

We ship MFC 6.0 for our product on NT4 (disabled by default)
We ship MFC 7.1 for our product on 2000+ (enabled by default)

If I do an OS detection, how do I selectively enable/disable these features?

Or should I use the Application Runtimes to resolve this rather than bundling the MFC DLLs?

You can do it any way you like, you just need to do it using the MSIcode view and the If command.