I'm actually working with Joice on this project at our company and we have tried in the past to just copy the files ourselves and do it that way but it caused a ton of issues so I had to go back through and clean it up and now we're trying it this way instead.
I think we actually solved this issue maybe by using the setup.LST with the correct installation path in it.
We're onto a new issue, though, would you happen to know all the options for Setup.exe?