I have a C# application that requires .net version 4 in order to run. I know how to create a basic installer using the Visual Stuido Installer Setup Project that comes with Vis
You should follow this guide on MSDN. It should tell you what you need to know about creating an installer to check for .NET 4.
The long and short of it is, if you set it as a prerequisite, the installer will check that it is installed.