Ryan,
I think I see the issue now. Repackager is not like Ghost, you're not capturing an OS image with the specific application. Instead you're capturing a single legacy application and migrating the setup.exe to a Windows Installer package (MSI). With Repackager, you need to do the following:
1. Set up a clean machine (this essentially means a workstation with just the OS plus any service packs that will exist on the systems you will be deploying the application to ). This is your baseline.
2. AdminStudio includes a standalone, zero-footprint setup for Repackager, which can be found in the
\Repackager directory, called Setup.exe. You can copy this to your clean system and install it to run Repackager standalone, instead of with the entire AdminStudio suite.
3. Start the Repackager and follow the instructions to either run Installation Monitor (recommended if you're targeting Windows XP or 2000) or Snapshot (if you're targeting other OS's).
Following the steps of the Repackaging Wizard, you will run the setup for the first application that you want to capture on the clean system. Ideally you will run the setup from a remote network location but this is not absolutely required.
You should only capture one application at a time and create an MSI from that. Creating nested installs (multiple applications) leads to potential issues that you want to avoid if you're just starting out.
Save the resulting files out to your production machine and you can then tweak as necessary.
This should get you started. Good luck! For further information, I recommend reading in the Help section: "Repackaging Legacy Setups" and all of the subsections there.
Also, we have an excellent book that will be extremely helpful in walking step by step through the process: http://www.installshield.com/news/books/application-repackaging/default.asp