I just downloaded and installed the Installer Projects extension for VS 2013 and tried to make a new .vdproj project. I created new "Hello World" console application project, then added a new Visual Studio Installer project to the solution, added the output of the console project to it, and tried to build it. Visual Studio opened a file save dialog and prompted me to save my .vdproj file. When I clicked "Save", it complained that it could not find the file that it was prompting me to save.
Why can't I create this simple .vdproj project? VS had no problem with saving the console application project files to this location.
I don't know why, but if you go to the folder and manually create an empty file of the same name as your project, when you try to save, it will respond, "File exists, Overwrite?" and when you select [Yes], it creates the project without a problem.