ClickOnce is a new deployment technology created by Microsoft to ease the deployment of applications over the web. This new deployment technology was first unleashed in 2004 and has quite a fan following. ClickOnce was first shipped with .Net Framework 2.0 and has close integration with .Net applications.

Windows Installer Service is a system level component that allows you to install and manage your applications in a manner consistent and contingent with the Windows Operating System. Windows Installer Service is known for its ability to handle shared and low level system components, while providing setup authors with features that allow them to repair when needed and rollback when installation fails.

Choosing Between ClickOnce and Windows Installer is an article on MSDN that compares the differences between Windows Installer Service and ClickOnce and talks about how the two can complement one another if used together.