I followed these instructions, and it worked well. http://blogs.cardwells.org/gis/2008/10/08/creating-installer-for-a-web-service-in-visual-studio-2008/
However, the default virtual IIS Diretory name is the same as my projet name.
For example, my web service is called MyCompany.RCT.WCFWebServices, and my setup project is called MyCompany.RCT.WCFWebServicesSetup.
When I run the MSI, it defaults to install as MyCompany.RCT.WCFWebServicesSetup instead of MyCompany.RCT.WCFWebServices.
Also, is there a way to change the default app pool? What about actually creating a new app pool? Or checking to see if the desired app pool is there, and if not creating it.