only use records.inf IF using internal compression ( using ISS script only, no cab files, which means removing the externalsettings from setup.ini )
you want to use precomp + srep...
first create arc file using -m0
then precomp the arc file
then srep the precomp file
finally arc the srep file... look here for instructions using different conversion > step #5
http://fileforums.com/showthread.php?t=91837
same steps just use the proper name for your game.