Don't forget to check out the Inno Setup newsgroups, the primary source for Inno Setup support.
Is it really free, even for commercial use?
Yes, it is completely free, even for commercial use. (There are restrictions on modifying and redistributing the source code, however; see the LICENSE.TXT file included in the source code package for details.)
How long has it been around?
The first version was released in February 1997. Inno Setup was actually released prior to Toolbar97, although it wasn't very popular until visitors who came to my site looking for Toolbar97 noticed this other tool too. Ever since it has been steadily gaining more and more users.
Why was it created?
I was writing an application which came in two versions, one for 16-bit Windows compiled in Delphi 1 and the other for 32-bit Windows compiled in Delphi 2, and soon realized that I had no decent installation program for it. Delphi 1 came with no installation builder whatosever, while Delphi 2 came with the bulky InstallShield Express but it only supported Win32. For my very basic needs, buying an installer just for this one program seemed like overkill. I searched the Internet for free Windows installers, but amazingly very few turned up, and those I did find did not meet my needs or had poorly designed user interfaces (which really defeats the purpose of having an install program in the first place). I had written an installer for a DOS program a year before using good old Turbo Pascal & Turbo Vision (not nearly as sophisticated though), so I had limited experience with this sort of thing. So I figured I'd at least attempt to write a simple Windows installer myself before purchasing a commercial one.
Why is it free?
I had this fairly featureful installer written, and I realized there were plenty of other people with exactly the same predicament I had. In its early stages, it didn't offer enough to compete with other shareware and commercial installers available at the time, so I decided, "Why not just give it away for free?" No use in keeping it to myself. So I wrote documentation to go along with it and created a tiny web site (page) for it. I didn't have anything secretive in the source code, so I went ahead and posted it too. And from there Inno Setup was born.