Is it possible to create custom forms inside your setup project?
The reason for this is because I would like to add a form where it will allow the user to: 1. enter the username and password to be written in the configuration file 2. enter new configurations at post installation.
There are only the canned dialogs you can add, right-click Start in that dialog and Add dialog. TextBoxes() would work, but there is no support for a password protection that I can see. In the textboxes dialog you end up with the values in properties called EDITA1, EDITA2 and you pass those to custom actions as [EDITA1] etc, they are case-sensitive, and the way they are passed depends on what kind of custom action you use to write into the text file.
If you have a post installation program that can change that configuration, it's often better to run that the first time your app runs. You can have a modern UI, it's much easier to test and debug, it runs with the user's credentials (custom actions don't) and you are creating that code anyway.