DirectSetup is an extremely simple library of functions for installing DirectX on a machine. It also provides a way to check the version of DirectX that is present.

You use the DirectXSetup() function from dsetup.lib. Just pass in the HWND of your install program if you've got one, the path to the "redistributable runtime" (a set of files included in the SDK - you have to put them somewhere that your setup program can reach them, such as on your game's CD), the appropriate flag, and you're done - the function will tell you if everything went ok and if the machine needs to be restarted.

Use the DirectXSetupGetVersion() function. It gives you two numbers - a version number and a revision number. To get the number you want out of that, use the LOWORD() macro on the version number. A more detailed explanation follows... The version number is the part you'll usually be interested in. It's made up of the 'major' and 'minor' versions - the major version in the top two bytes, and the minor version in the bottom two.