I've said a lot elsewhere on this forum, the rants dotted all over the place and a thread of positive comments as well, so I'm not going to rehash.
I will agree with you that the Merge Modules are a serious problem. The ones that are specifically built using WI methodology aren't so bad, but those IS ones that just wrap a non-WI installer (MDAC, Jet, etc) are nothing short of useless.
I've found that the best approach is to just fudge them :)
But then all this was true of ISWi as well, it hasn't got worse it just hasn't improved at all. A lot of other things have improved (I would give my left arm for a proper way of handling ModuleXxxSequence tables though) and all-in-all ISD 7 is a step in the right direction.
Like the Final Fantasy series, I strongly look forward to version 10 ;)