[Setup]
AppName=My Program
AppVersion=1.5
DefaultDirName={pf}\My Program

[Files]
Source: ".\SystemFiles\vcredist_x86.exe"; Flags: dontcopy

[Code]
function IsRuntimeInstalled: Boolean;
begin
  Result := False;
  // here will be a statement that will check whether the runtime is installed
  // and return True if so; see e.g. http://stackoverflow.com/q/11137424/960757
end;

function PrepareToInstall(var NeedsRestart: Boolean): string;
var
  ExitCode: Integer;
begin
  // if the runtime is not already installed
  if not IsRuntimeInstalled then
  begin
    // extract the redist to the temporary folder
    ExtractTemporaryFile('vcredist_x86.exe');
    // run the redist from the temp folder; if that fails, return from this handler the error text
    if not Exec(ExpandConstant('{tmp}\vcredist_x86.exe'), '', '', SW_SHOW, ewWaitUntilTerminated, ExitCode) then
    begin
      // return the error text
      Result := 'Setup failed to install VC++ runtime. Exit code: ' + IntToStr(ExitCode);
      // exit this function; this makes sense only if there are further prerequisites to install; in this
      // particular example it does nothing because the function exits anyway, so it is pointless here
      Exit;
    end;
  end;
end;