I have successfully set up an MSBuild script that when run locally builds and packages up my site and places the package in the desired folder. However when running it on S
Found a similar problem here although in their case they were lucky enough to get an error message in my case the packaging steps were being skipped with no error or warning messages
Taking the last step in the suggested solution fixed the issue for me which was...
From the C:\Program Files\MSBuild\Microsoft\VisualStudio\v10.0 folder on your dev machine copy the "Web" and "Web Applications" folders to the equivalent directory on your build server.
This fixed my problem!