I don't know how the JKI install works, but you are right.
You only need to compile the hierarchy from the top level VI (which is what your VI tree is doing) rather than compile every VI..
I scan all VI's and see if they have any parents (lone VI's - these will be the top level VIs) then compile "Entire Hierarchy" only for those VIs and just save all the dependants. Opening a reference is quick, but compiling isn't. The advantage of this method is that you don't need a VI Tree VI (so it's more generic) and, for a couple of hundred VI's you only end up compiling a small subset and the compilation process is smart enough that shared VI's that are already compiled and/or saved are skipped (or so it seems)
It's no really an issue in 2009 because it's all very quick. But 2010 is such a slug (installing SQLite API in 2009 takes about 20 seconds. In 2010 it's about 1 minute i.e 3x slower)