WiX

The Windows Installer XML (WiX, pronounced "wicks"), is a free software toolset that builds Windows Installer (MSI) packages from an XML document. It supports a command-line environment that developers may integrate into their build processes to build MSI and MSM setup packages. WiX was the first software released by Microsoft under an open-source license called Common Public License.

The WiX distribution includes Votive, a Visual Studio add-in that allows creating and building WiX setup projects using the Visual Studio IDE. Votive supports syntax highlighting and IntelliSense for .WXS source files and adds a WiX setup project type to Visual Studio.

Read more about WiX:  Internal Structure, History