This error is probably due to a dll conflict. If you have Visual Studio .NET installed or Orca 2.0, then you have a newer version of mergemod.dll on your system that is not backwards compatible with the one that was shipped with LabVIEW 6.1. In order to generate installers with LabVIEW you need to unregister the one installed by .NET and reregister the one installed by LabVIEW by doing the following:
Open a command prompt
change to the "\Program Files\Common Files\Microsoft Shared\MSI Tools" directory
run "regsvr32 /u mergemod.dll"
This should report that the unregister was successful
change to the "\Program Files\National Instruments\shared\Installer" directory
run "regsvr32 mergemod.dll"
This should report that the register was successful
Now A
pplication Builder should be able to generate installers.