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MSI 4.0, the latest version of windows installer service was released with Windows Vista recently. Most of the enhancements in msi 4.0 are in relation to features found in windows vista or Longhorn, e.g. the integration with Restart Manager, ability to communicate with UAC to ensure proper installation on Vista and Longhorn.
In addition to above, Microsoft has also introduced some new properties in msi 4.0 that facilitate setup authors during installation time. You can now set the MsiLogging property via the property table to automatically log the installation. The log file by default gets created in the temp directory on the system. You can change this by setting the MsiLogFileLocation property. A complete list of enhancements can be found on MSDN at : What’s New in Windows Installer 4.0.
Since the enhancements in MSI 4.0 are tied with new features found in Windows Vista and Longhorn, Microsoft is not releasing the redistributables to install msi 4.0 engine alone. Currently the windows installer 4.0 engine is only distributed with Windows Vista and Longhorn.