Great article by Scott Guthrie in which he describes how we can create packaged ASP.NET Setup Programs with VS 2005:
You have built an ASP.NET Web Application using Visual Studio 2005, and want to enable customers to automatically install and deploy it on servers via an easy setup program.
Specifically, you want to create a standard Windows setup program that will create and configure the application on IIS, copy all of the application’s files to the appropriate location on the server, and ensure that ASP.NET 2.0 is correctly mapped to run the application. You also want the setup program to prompt the customer for the database location that the new application should use, and have the setup program automatically update the web.config file with the database connectionstring settings the customer provided.
One solution to consider using is the built-in “Web Setup Project” support that is built-in to Visual Studio 2005. Web Setup Projects can be used to pipe the compilation outputs from VS 2005 Web Application Projects as well as Web Site Projects (when used with VS 2005 Web Deployment Projects), to create encapsulated Windows setup programs. The below walkthrough demonstrates step-by-step how to create and use one.