For a listing of the commands available with setup.exe see:

http://support.installshield.com/kb/view.asp?articleid=Q102894

To generate the silent script (.iss) use:

setup.exe /r /f1"c:\mysetup\mysetup.iss"

To run the silent mode script use:

setup.exe /s /f1"c:\mysetup\mysetup.iss"

In older versions of InstallShield (4.x) you will need to specify a valid path in the szDir key of the [SetupType-0] group in the .iss file, e.g.:

[SetupType-0]
Result=301
szDir=C:\mysetup