I think alot more people than myself could use a module install and uninstall wizard. I believe this wouldn't be too complicated to implement, so I suggest we get started. I've given it a little bit of though, and here some of them are in text format.
I believe a good way to go about is to make an installwizard module. It would be nice to be able to turn it on and of as there might be som security issues involved.
Many may consider it a problem to upload files into the modules directory. I believe a good solution to this is to connect to the ftp-server of your site in the script. Some of the ftp details should be configured and stored, username and password should be provided on every install to minimize security risks (please comment on the security, I'm not to sure about it). This way people could download the module package, and upload that in the administrator section of their drupal site.
Every installable module should implement an install hook, and possibly an uninstall hook. These could benefit from helper functions in the installwizard, such as installwizard_execute_db_file().
The wizard should show several screens depending on the module. Users could be given the oppertunity to configure new permissions, menuitems and module specific options defined in the module itself in the install process. The wizard could call parts of the drupal core to accomplish this.