At the moment we are not sure if this a bug or a feature or if it is a regression (very complex source code behind-the-scenes). SetupBuilder is able to install both .Net and Win32 assemblies in either Global Assembly Cache (GAC) or privately for a particular application (installing .Net and Win32 assemblies, as side-by-side on Windows XP).

I'll get back to you!

Thanks again for all your time.