Advanced Installer can do that too. It creates a small executable that can launch an MSI package from an URL you specify, so the package downloaded by the user is very small. As a bonus, you can split the application in features, and set it to create one CAB archive for each feature, so the actual install process will download only the CAB files for the features installed, reducing the download time for users that don't install all the features.
To have the user see only a small progress bar instead of full MSI dialogs you just need to tick a checkbox from Install Parameters page.
However, you should now that this feature is available only in the commercial licenses, you need at least a Professional license. You can test it, during the trial period access to all of its features is not restricted.
