Hi Josh,
As far as I know (and it is based on a research I made about 1 year ago), there is no way to redistribute MSXML3 besides using the MSXML3.EXE installer or the equivalent merge modules available at msdn.microsoft.com/xml.
Another issue relates to MSXML3 EULA. It is not "legal" to redistribute MSXML3 without Internet Explorer 5.0+. MSXML3 is supposed to be redistributed by using the MSXML3.EXE or the Merge Modules available at the web site above.
Maybe the easiest way to distribute MSXML3 if you don't plan to include the merge modules in your installation is to make your clients to install Internet Explorer 6. This version already installs MSXML3.
HTH.