Does WinSCP have to be installed?

Does WinSCP have to be installed on the server where the COM library is being used?

being that it's a COM library, I'd think the answer is yes, but we try not to install too many products on our IIS production boxes.

Do you?

You do not have to to install WinSCP using WinSCP installation package. If that's what you mean.
We actually do not recommend using the installed GUI version for COM. You better keep a separate copy of the WinSCP binaries for the COM.