Given your reply to my comment, it would make things especially bad if both the client and server were installed on the same machine.
From Windows Installer Components:
Two components that share the same component ID are treated as multiple instances of the same component regardless of their actual content. Only a single instance of any component is installed on a user's computer.
(Emphasis added).
Plus:
- Each component must be stored in a single folder.
The following bullet point may sound like it contradicts these:
- No file, registry entry, shortcut, or other resources should ever be shipped as a member of more than one component.
But that's actually saying things the other way around - if you have two installers that install the same DLL to the same location, they must be part of the same component. It's the location of the file (as well as its name, and the bits inside it, version, etc) that's important.
Re: first line of my answer, and given what you're planning to do - if the server was installed (DLLs in server directory), and then the client was installed, the DLLs would not be present in the GAC, and so the client app wouldn't work.