The best freely available installer program I have found is Inno Setup. NSIS2 is obviously the most popular and well known but when I was investigating both systems I found NSIS2 unwieldy and the scripting not very intuitive. When I saw the Inno Setup scripting it just made sense, the language design is around installing programs and files. It solves a very domain specific problem.
The installers look great on whatever Windows version you run them on and there has been recent work on Vista compatibility. The installers generated are really quite compact and in comparison to most MSI installers I have run it is substantially faster. Also it is capable of 32 and 64 bit installers.
What makes it even better is it comes with a great GUI frontend called ISTool. It provides a GUI for all elements available and has excellent built-in help using tooltips.
Inno Setup comes with a comprehensive set of translations and also provides non-supported translations on the website. So if your program is available internationally it is an easy feather in your cap.
Inno Setup is the simplest to use and the fastest to get up and running. You can knock up an installer in minutes without the need for consulting large manuals, I had my first test installer created from scratch in under ten minutes, so I imagine anyone can do it.