If a component GUID changes, but the
same files are in the component,
what happens on a major upgrade?
First, the question is whether the old component gets uninstalled. If you don't configure your upgrade to uninstall previous versions of your product, then the component will not be removed (although its files may be overwritten). See also answer to question 2.
Second, the question is whether the new component will be installed. A component is only installed if its keypath is missing. If the keypath is a versioned file, then a lower version also counts as "missing".
Finally, if the new component was marked for installation, and Windows Installer encounters a file with the same name as the one it is trying to install, the File Versioning Rules determine whether the file is replaced or not. For example, a file with a higher version will not be downgraded.
If a component is removed from a
product, what happens to the
associated files on a major upgrade?
Do the original files get removed on
an uninstall?
Unless you put the right entries in the Upgrade table and the InstallExecuteSequence that tells windows installer to remove the old product, the old components will be left alone. See this blog post by Alex Shevchuk for guidance on how to create an installer in wix that removes old versions.
Am I correct in saying that a major
upgrade will replace all files in all
components ...
No. It depends on whether the old component was removed first, whether the new component was installed depending on the keypath, and the file versioning rules.
That being said, a major upgrade is typically configured to completely remove any older version of the product before installing the new version. As long as you follow that rule, it's OK to think of a major upgrade as one that replaces all files.
Suppose that a product was deployed on
a machine without using an installer.
If you then created an installer, with
files of the same name in a component
as what's in the installed directory,
what happens to those files if you
tried an installation?
Again, it depends on whether the components get installed, depending on their keypath, and the file versioning rules.
Am I correct in saying that if I used
a tool like heat to create an xml file
with all the files in a directory
(like for a website), that you'd have
to keep the GUIDs the same (manually
or with a script), or you'd only be
able to do major upgrades?
Correct. The GUID is the identity of a component, so if you would change the GUID there would exist two components (in the old and new version of your product) that installed the same resources to the same target location. And that's a no-no according to MSDN: "Never create two components that install a resource under the same name and target location."