HI,
In Visual Studio Environment from versions 2005 to 2010 a
prerequisite installer is a must required component on creating your
visual studio projects. You do not need to install this “Prerequisites”
manually as there are ways provided by Microsoft to create and merge
this components into your Project setup installer, by installing your
application this installer will automatically install your prerequisites
components onto your client’s computer without having to worry to
install it manually. This Prerequisites normally seen on Prerequisites
dialog box as shown below:

In this example we are about to create the Crystal Report 2010
Runtime Prerequisites with some things to follow. The Lists below shows
all the required components that we need for us to create one.
- Download and install http://code.msdn.microsoft.com/bmg/Release/ProjectReleases.aspx?ReleaseId=1567 for Visual Studio 2008.
- Crystal Report 2010 Beta 2 Runtime 32 bit (http://downloads.businessobjects.com/akdlm/cr4vs2010/CRforNET40_x86.exe),
at this time of creating this article, the available is Beta 2, SAP
Crystal Report will be releasing its new CR release soon. You maybe
interested also on how to install Crystal Report 2010 Beta 2 on your
development Machine consider http://www.sourcehints.com/articles/How_to_use_Crystal_Report_2010_in_VS2010.html.
After installing the above software, open the Bootstrapper Manifest
Generator window, click File->New on the New Project Dialog Box
select package Manifest,

click Ok. On Projectname enter “http://www.sourcehints.com/articles/How_to_use_Crystal_Report_2010_in_VS2010.html” without double quotes, on the left portion of the window above the package listbox click the icon “Add Install File”

Locate the Crystal Report Beta 2 Runtime (http://www.sourcehints.com/articles/How_to_use_Crystal_Report_2010_in_VS2010.html) on your machine after you have downloaded it from the Microsoft website.

Select All Languages and click ok. Click the Build icon to build the manifest prerequisites,

Do not close right away the Build results dialog box as you need to
locate the generated files and manifest file, normally the location of
this is here “C:\Program Files\Microsoft SDKs\Windows\v6.0A\Bootstrapper\Packages\Crystal Report 2010 Runtime”
As this version of Bootstrapper Manifest Generator is version 2008 so
it does generate in v6.0 folder. In order that this Prerequisites will
appear in Visual Studio 2010 IDE you need to do some tricks. Copy the
generated files from that folder, copy the whole folder “Crystal Report 2010 Runtime” to this path “C:\Program Files\Microsoft SDKs\Windows\v7.0A\Bootstrapper\Packages“, the v7.0A folder is the location for all the Prerequisites Packages for Visual Studio 2010 Projects.

After copying you can now view this Prerequisites package on
Prerequisite Dialog box as shown on the first image. The Content of “
Crystal Report 2010 Runtime” folder has one folder “en” and two files, the “
CRforNET40_x86.exe ” and the “
product.xml” manifest file. the content of “
en” folder also contained “
package.xml” file.
Refer the following website for more information
http://social.msdn.microsoft.com/Forums/en/winformssetup/thread/907c4d43-3533-46d2-8fc4-251bb5e4adaf