Update – 10/21/2016: The Windows Live Essentials 2009 & 2011 links have been updated to download from the Internet Archive since they are no longer available for download from Microsoft’s servers. Also, Windows Live Essentials 2012 support and availability is scheduled to be discontinued on 1/10/2017. That link will be updated to download that version from the Internet Archive once it becomes unavailable from Microsoft’s servers.
Note: The following how-to article should be disregarded as Windows Live Essentials has been discontinued. You can still create a disc that can automatically launch the installer of your choice when inserted, however, I recommend that you download all 3 versions of Windows Live Essentials and simply save them on a single CD-R for archival purposes. This way, you can choose which version to install (after selecting “open folder to view files” upon inserting the disc) without the need for creating additional discs.

Windows Live Essentials is a collection of updated Windows programs that are similar to some of the programs that originally came with Windows XP and Windows Vista. (You will need to install Windows Live Essentials on Windows 7 since the original programs are not included). Upon installing Windows Live Essentials, you usually need an internet connection in order to download the Windows Live Essentials programs through its download manager. This makes it hard to install Windows Live Essentials on a computer that’s not connected to the internet or to preserve a copy of an old version of Windows Live Essentials.

What I’m going to explain here is how to create a setup disc for Windows Live Essentials. After searching the internet for an hour, I found a link to Microsoft’s website that allows you to download an offline setup program of Windows Live Essentials.

Download the Windows Live Essentials version of your choice and save it to your desktop. Do not change the filename.

Windows Live Essentials 2009 (build 14.0.8117.416) – Windows XP SP2, Vista, 7, Server 2008
Windows Live Essentials 2011 (build 15.4.3555.308) – Windows Vista SP2, 7, Server 2008 R2
Windows Live Essentials 2012 (build 16.4.3528.331) – Windows 7, Server 2008 R2, 8

While you wait for the download to finish, the next step is to create an autorun file so when the disc is inserted, it will automatically run the Windows Live Essentials setup program. Open Notepad and copy and paste the following text.

[AutoRun]
open=wlsetup-all.exe
icon=wlsetup-all.exe,0

Save the document with the filename Autorun.inf

AutoPlay window displaying the Windows Live Essentials setup program and the Windows logo for the CD drive icon.

When Windows Live Essentials is done downloading, copy both wlsetup-all.exe and autorun.inf files to the CD drive you use for burning files though Windows Explorer. Give the disc a creative label. (Example: win_live_ess_w3). If you are using Windows Vista/7, make sure you select “mastered” under the formatting options.

Once the CD writing is complete, eject and reload the disc. In Windows XP, you will see the setup program. In Windows Vista/7, you will be greeted with the AutoPlay window asking if you want to install or run wlsetup-all.exe. Best of all, Windows will display a Windows logo for your CD drive while the disc is inserted. (See image).

Now you have an offline setup disc with the Windows Live Essentials programs.

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