I would strongly recommend not trying to roll the NI distribution of the LabVIEW runtime into another MSI. We attempted that with the LabVIEW 6.0.2 runtime a while back, and the biggest problem is that the Windows Installer subsequently considered the LVRTE an inseparable part of our application. So if a problem happened, Windows refused to let us uninstall the LVRTE directly. Plus, the terrible installation builder we were stuck with (I won't name names, but it's different than the one you're using) had other problems that prevented our own EXE from being uninstalled. This caused all kinds of problems down the road, including rendering TestStand completely non-installable on the target PC (because TS tries to install LVRTE v6.0.2). Ever see an 'Error: ad
ministrator permission needed' message on a Win98 PC with (by definition) no administrator? Users hate that.
What you can do, however, is copy the contents of C:\Program Files\National Instruments\shared\LabVIEW Run-Time\6.1 into a directory with your built EXE, and make your MSI from that. This is a simple, reliable approach with the one minor disadvantage that other LV-built apps will not be able to 'see' this copy of the LVRTE on the target PC.
Another thing you could try is adding to your MSI a small executable that runs upon completion of installation. This EXE could check the Registry for the LVRTE and any other NI redistributables and automatically download/install them from NI if needed. That way, you're cutting several megs out of your MSI file size.