After successfully publishing a ClickOnce application, when you try to install the application you receive an XML page on the browser window as IE opens the Application Manifest
In this scenario we receive an XML page when we click on the “Install” button for the ClickOnce application. The web server hosting the ClickOnce application must have the .Net Framework 2.0 installed, and IIS should be configured to use it. The .Net Framework 2.0 adds a new tab to the Web Site Properties named ASP.Net. There is a drop down that lets you choose to use ASP.Net 1.1 or 2.0 for that particular web site.
If this doesn’t work then probably the MIME types for .application are not configured on the web server. If this is the case please follow the steps mentioned below to configure the MIME types manually.
· Open IIS Manager, Start->Run->inetmgr
· Open the properties for the Virtual Directory that contains .application file.
· On the HTTP Headers tab, click on the "MIME Types..." button.
· Click the "New..." button to register a new MIME type.
· In the Extension textbox, type ".application" (without quotes).
· In the MIME Type textbox, type "application/x-ms-application" (without quotes). Similarly also add the following two MIME types:
.deploy application/octet-stream
.manifest application/x-ms-application
· Click on OK button to close all of the dialogs, and run the ClickOnce application again.
Reference: https://msdn.microsoft.com/en-us/library/ms228998.aspx