From LedHed's Wiki
Overview
This is a registry hack to add 'Extract' to the Windows Explorer context menu when you right click a MSI file.
Registry
Paste this into a notepad and save as MSI-Extract.reg. Then double click it to add it to the registry.
Windows Registry Editor Version 5.00 [HKEY_CLASSES_ROOT\Msi.Package\shell\Extract\Command] @="msiexec.exe /a \"%1\" /qb TARGETDIR=\"%1-Unpacked\""
This will extract the MSI into a folder with the same name as the file.