So there is a great tool that is up on CodePlex, makes things a lot simpler when packaging our WSP solutions.
The WSPbuilder is a console application that creates SharePoint Solutions files based on a folder structure. WSPBuilder will automatically traverse a "12" folder structure and creates a SharePoint solution manifest.xml and the wsp file based on the files it finds. Therefore you do not need the knowledge of how to create a solution manifest.xml and wsp file any more. The folder structure that WSPBuilder uses to build the wsp file is actually the same folder stucture you will find in: "%Program Files%\Common Files\Microsoft Shared\web server extensions\12". So all that you have to do, is the create a \12 folder in your project and add your files to that folder matching the same structure as if you where to put them directly into the "%Program Files%\Common Files\Microsoft Shared\web server extensions\12" folder manually.
WSPBuilder can be downloaded here: http://wspbuilder.codeplex.com/