WiX does work with Visual Studio 2008 Professional. Download one of the latest weekly releases here. The latest SourceForge version available will give a message about requiring Visual Studio standard or professional, but will not work with the Express version. The weekly release, linked above, resolves this error message.
I have WiX installed with Visual Studio 2008 Professional on Windows Server 2003. It provides a means to generate .msi files from XML files and integrates into Visual Studio to provide another means of generating the WiX project files.
In my understanding, this can be compared to a MAKE file and allows for repeatable building of releases quickly and without repeated investments of time. This install builder should make it easy for maintaining release schedules and keeping a consistent environment for creating setups.
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