Hi Rene
MSI 3.0 is the MSI version that is required for installing .NET 2.0 on Windows operating systems. MSI 3.1 is not required. This information is also available on the Microsoft web site, in the section explaining .NET 2.0's system requirements.
Windows XP without service packs does not include MSI 3.0. In addition, the InstallAware runtime installer is smart enough and automatically installs 2.0 on Win9X platforms for you, without you manually selecting 2.0 on the runtimes view.
The application runtimes view is really smart and works well as designed. I understand you are a bit suspicious and have a habit of double-checking things...
...so let me tell you of another advantage that you get by using the Application Runtimes view:
1) When you do web builds, your main installer won't include any of these runtimes bundled with it, and download them from the web only when needed. It will however contain the application itself so your setup will run without mandating an Internet connection, as long as the runtimes are found.
2) When you do a single file build, your main installer will contain everything, inside a monolithic file. You may have your reasons for taking this route, but we generally recommend web builds.
3) And finally a CD build stores everything in multiple directories, in uncompressed form.
All of this happens from a single source - you don't have to manually change your code, just choose your build type (or even do multiple builds in a single pass).
And of course, in compressed builds, you get the advantage of better compression, at absolutely no effort to you!
Finally:
a) The Application Runtimes view is end-user extensible, this whitepaper describes how:
http://www.installaware.com/installawar ... s_view.pdf
b) Application Runtimes which have dependencies automatically select them when they are chosen for an install
c) Your own elements added to this view can build on top of the existing dependencies and - for free - leverage all the installation logic, code, data, and better compression of their own nested runtimes
Hope that satisfies your curiosity!