Okay, let me try (and I'll try to stay basic):
It's a file format. The last part of any computer file is the File Type or Extension. They used to be limited to three characters (the part after a Dot) and...
exe = executable (a program, with a User Interface, or, pretty pictures, buttons for you to pick, etc)
bat = a batch file (a list of commands the end user would have to do one-by-one, but as a task list automated) and cone include the task that runs the exe, and even passes optional parameters (such as run silently = without displaying to the computer user that something is being done)
msi = a MicroSoft Installer (msi), which could be inside of either of the other two, but is the one that does the heavy lifting for programs and updates, and often does not include additional parts such as marketing hype and other links. And, the msi can be installed more on-demand or automatically, where as an exe update would need someone (or something like a bat file) to initiate it.
msi also is easily distributed to other computers and/or put on the network, then launched from there.
You've likely seen how a CD to install a program has an Autorun, which will in turn trigger the msi.
You might see/need this option, for instance, if the programmer/distributor realizes that you might not be the Admin user (your Windows profile) on a workstation, but you need to run the update, anyway. I like them, as they are more direct and more efficient.
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