In the Installer for XAMPP Windows 1.6.0 [Basic package] I found an error in the install as service script "mysql_installservice" which prevents it from being installed as a windows service.
The section
:MainNT
echo Installing MySQL as an Service
copy "%cd%\bin\my.cnf" /-y %windir%\my.ini
bin\mysqld-nt --install mysql --defaults-file="%cd%\bin\my.cnf"
echo Try to start the MySQL deamon as service ...
net start MySQL
should instead read
:MainNT
echo Installing MySQL as an Service
copy "%cd%\bin\my.cnf" /-y %windir%\my.ini
bin\mysqld --install mysql --defaults-file="%cd%\bin\my.cnf"
echo Try to start the MySQL deamon as service ...
net start MySQL
that is remove "-nt" on line 32 of the code.