That code looks pretty good, but since it says "I needed to create a shortcut in the Startup group, not on the Desktop. " I think I can help.
I found some VBA code about a year ago that I saved just incase I ever needed to create a shortcut on the desktop. Unfortunately I have no idea where it came from or who the author is. (It may have come from tek-tips.) I do however, know it works.
I believe if you just create a function somewhere in your setup1.vbp and call it before the setup1.exe ends it should work.
Private Sub Command0_Click()
Dim objShell As IWshShell_Class
Dim objShortcut As IWshShortcut_Class
Dim FolderItem As Variant
Dim lsPath As String
Dim lsShortCut As String
Dim lsURL As String
Dim lsConfigFileName As String
Dim nType As Variant
Set objShell = New IWshShell_Class
lsShortCut = "Shortcut to Test.mdb"
lsPath = Chr(34) & "C:\Test.mdb" & Chr(34)
'lsShortCut = App.Title
'lsPath = App.Path & "\" & App.EXEName
For Each FolderItem In objShell.SpecialFolders
If Mid(FolderItem, Len(FolderItem) - 6, 7) = "Desktop" And _
InStr(1, FolderItem, "All Users"

= 0 And _
InStr(1, UCase(FolderItem), "ADMINISTRATOR"

= 0 Then
Set objShortcut = objShell.CreateShortcut(FolderItem & _
"\" & _
lsShortCut & _
".lnk"

objShortcut.TargetPath = lsPath
objShortcut.Arguments = lsURL & " " & _
lsConfigFileName & " " & _
CStr(nType)
objShortcut.Save
End If
Next
End Sub