I've updated WSE to SP1 and noticed that you must use the msi
redistributable provided. The msi installs the Microsoft.WebServices2.dll
and a two publisher policies in the GAC.

My question is why is it required to install the msi, which effectively
kills my ability to use "xcopy" and "smart deployment"?
Is the WSE assembly required to live in the GAC? Do I need the publisher
policy if I already compiled against the latest SP1 version? Shouldn't the
publisher policy only be required to allow existing apps compiled against
2.0 to "float" up to the newer assembly?
If the answer is yes to all of these, is there going to be a merge module
provided instead of the msi so that I can bundle the runtime into my own
installation. Forcing our end users to do any additional work i.e running a
separate msi, causes total chaos on our support phones.

Thanks,
Darren Mombourquette