Back in 2005 I worked on a dotnet desktop application. At the time I was looking for installers to create the install package. During my search I cam across a neat tool that would bind your application with dotnet itself only including the parts of dotnet that were required for the application to run. It did this using dependency resolution. Licensing started at about $5000, which was about half the budget of the project so I never purchased it.
I don't remember the name of the installer and I have googled but found nothing. Have you come across this product? Do you remember the name or have a link to their site?
EDIT: To clarify, when using this product you did not need to check that dotnet was installed or which version was installed and there was need to install dotnet. dotnet simply was linked into the application itself so the application and dotnet where indistinguishable.