Just confirming: If I distribute my R package as ZIP/TAR then installing the package will not automatically download/install dependencies because I have to set repos = NULL in install.packages() and dependencies parameter is not used if repos = NULL? The way to possibly get this to work is to package an install script. Is that possible? Am I completely missing something here and there is a mechanism to install from source AND automagically download and install dependencies?
You could make your own repository and set repos to be a vector of the places to look for packages, where it would start with your own repository and then include a link to a CRAN mirror. This is what I do and it works quite nicely, as then I can easily share my packages with others and update them from whatever computer I happen to be on.