PowerShell Windows Installer Com Object
See the this thread for some guidance. Basically the MSI COM object is implemented in a way that confuses PS. There is a link to a blog post discussing it in that thread.
The originally accepted answer link, is no longer valid.
In the comments, JohnB has posted a link that has a great example of how to use the Windows Installer from Powershell.
There's also a CodePlex project that wraps a lot functionality and could be useful:
Windows Installer PowerShell Module