How does Google Chrome installer work?

It actually is ClickOnce.

 function installViaClickOnce(opt_navDocument) {
    queueThankyou(10000, '\x26clickonceinstalled=', opt_navDocument);
    downloadInstaller(areStatsEnabled(), _GU_buildClickOncePath, "/update2/installers/clickonce/GoogleInstaller_en.application");
    showThrobber(true);
 }

Google's ClickOnce application installs the installer for Chrome which in turn does the download for the browser.

Actually it is indeed bootstrapped with the ClickOnce installer. It uses ClickOnce to get it's components onto the machine and then installs the rest of chrome via the downloaded components.