You can use this Wix tool or command called Heat, which will automate the adding (and creating GUIDs) for a bunch of files. Really it's the underlying MSI target that's so painful, especially when you get into versioning. The OS wants to have detailed information on every file that is part of your installation. I think this is primarily for uninstallation purposes, but also for upgrades and who know what else. If I could get away with it, I'd just use NullSoft. It's like writing assembly, but it's so much simpler.

With Wix/MSI, there were certain executables that I could never get it to run as part of the install process. The XML would look the same as other execute commands that worked, but I could never figure out why they didn't run.