I agree with Randem in terms of not using P&D W, it has a few "issues" that other installation software doesn't.
Now for a few of the points you raised:
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so the package and deployment wizard bundles the final .exe and its dependencies along with relevent file structures(?) into one setup.exe file.
is the final package similar to the professional software packages taht one downloads from the net?
Yep :)
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i guess special fonts used will also packaged, correct?
Only if the installer you use supports this, and you tell it which fonts to install.
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why do the files need to be registered with the OS?
If they aren't then the OS doesn't know about them. Your program essentially asks the OS where to find them, if it doesn't know then it will make an attempt to find them. If it cant find them you will get your previous error.
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will the setup.exe package work with windows xp, 2000 and xp, or will it just work with the OS it was created on?
most will work for all recent versions of Windows, but P&DW has issues with Windows 2000 (I think).
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hey randem, in the link you supplied, it mentions VB6 Runtime Files, what are those, i guess the Microsoft's Package and Deployment Wizard takes the OS dependent runtime files, but other installation packages would take into account generic runtime files
Any installer which supports VB programs should include all of the required files (such as MSVBVM?0.DLL, but you don't need to know them).
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and the excel files will have to be manually copied to the corresponding "original" locations othe excel files.
You can get the installer to copy the files to where you like, in most cases the application folder is best (App.Path in VB).
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my program accesses a couple of excel files, i think it should have MS excel installed too, the package wizard would not be able to take care of that, correct?
If you add a reference to Excel (under "project" - "references") or use CreateObject("Excel.Application") then this is correct. You will need to install Excel/Office separately - and have a valid licence for it :)