>Is it possible to create one smaller than 12mb?

I have checked recently since I prefer to distribute zipped application (without an installer). However last time I did, Yes, I could deploy smaller MSI. How much? Do not expect miracles. Compression has it own limits.

To get you figures, my current VFP-based-and-moleboxed-application dumps a VFP exe, VFP dlls, a bunch of dlls and ocx-es in a standalone executable was decently compressed. From 17,829,288 bytes including the program itself, stantard deployment vfp dlls (7,151,616 bytes) and 8,239,888 bytes of extra dll and ocx-es into a highly compressed executable sized 13,055,128 bytes.

If deployment of VFP is an issue for you (file size is only ONE issue among others), I strongly suggest you test molebox. In spite of a few quirks, documented or not, IMHO it may bring a VFP application to a new level of deployment ease.