How do you mean, it unpacks everything to HD ?
Are you sure ?
The CreateFile shit for DLLs is only used to get them loaded properly, the actual content is not copied to HD, only some sort of mini-dll-stub...
I don't know that much about its inner working, but MB's 'virtual files' (if you can actually call it that way) are readonly, so you access files via CreateFile and ReadFile and Molebox's redirections/hooks take care of 'opening the file', returning a (fake/internal ?) handle and writing the file's content to a buffer.
In contrast to Thinstall it does not offer virtual registry access or writing to virtual files...
Doubt that's needed for his purposes but basically you're right, Thinstall is the more professional solution
As a result it's more than 10 times as expensive as Molebox, just an option if you don't have 5000$ for a Thinstall license...