While our team is starting work on our first DNN 7 sites, we're running into a small impediment. It would seem that the development cycle for a skin or module is that for every single little change you make, you need to create a new package and upload it to DNN. Our engineers are worried that they'll get caught in a loop of:
Consider this to also be a metaphor for module development. Is there a better process to develop modules and skins? Should we create the initial skin package, tweak the installed version, and then update the original files?
Edit: It's our intention to keep the installable skin and module files under source control in TFS, and deploying packages as changes are made.
If you're developing those skins locally, running at a URL like http://dnndev.me/ you can make all the changes you want, without having to package/install the skins.
That is also the recommended approach for doing module development.
Here's a tutorial on setting up your local development environment:
http://www.christoc.com/Tutorials/All-Tutorials/aid/1
If you aren't doing local development, than you have to go through the hoops for packaging/deploying or uploading to the webserver via FTP/file system.