Thoughts on the Visual Studio Extensions for Windows SharePoint Services 1.2

I've been using the Visual Studio 2008 Extensions for Windows SharePoint Services for a while now and I have a few issues with it.

1. How can you simply create a WSP without doing a deploy of the code to a WSS server instance.
2. Should the content of the pkg folder be source controlled - I got into a few troubles when I tried to keep it source controlled but something tells me I just need to do things a bit differently.
3. How does the WSP View work on the back end?