In Visual Studio 2010 you’ll find a new extension manager that makes it much easier to package and deploy extensions to Visual Studio. Pedro has more information: Early Buzz on the VS SDK and Extension Manager, Introducing VS Extension Manager.
We’ve exploited this to deploy DSL Tools. Gone has the DSL Setup project which used WiX to create and MSI. Instead, a DSL authoring solution builds a VSIX package and uses that to install the DSL in the experimental instance of Visual Studio. But even better, to install the DSL in the main instance of Visual Studio, all you have to do is open the VSIX file in windows explorer and respond to the prompts. Restart Visual Studio and your DSL is installed! How easy is that?
I’ve captured all this on video.