I've had the same problem, like many people I think. I've tried to play with the registry entries, without success. Check the services you are trying to install are not file system driver or driver services because Windows Installer doesn't support these types of services. I've read threads (in the Developer forum) of people who have created their own DLLs to install those services.
I think they've used the InstallScript UseDLL function and the Windows API functions CreateService, OpenSCManager, OpenService etc...