Yup. Hardware and drivers are on the blacklist for installations. I don't believe changing to a different repackaging project would help you.
The problem is that specs of the hardware/drivers in the registry tend to be machine specific and are dynamically generated. The hardware keys in the registry are dynamicaly generated at each reboot.
However, there is beta going on at the moment for the Windows Installer device driver framework (I'll post a link later when I can get access to my e-mail) and there is going to be support for this in Installshield. So that might make things better in future.
A lot of people do get drivers/hardware stuff to work but it is a lot more work. Often you have to resort to custom actions to do some of the installation. For instance, devcon.exe is a command line tool for the device manager. You can call this with a custom action and an inf file.