hook_install() is the hook used to perform setup tasks when a module is installed.
hook_install() is the hook called when a module is being installed, but not when the module is being updated.
In Drupal 6, if a module is using a database table, its hook_install() implementation needs to call drupal_install_schema() in order to install its schema. This is not anymore necessary starting from Drupal 7, as Drupal 7 automatically calls drupal_install_schema() when installing a module.
