The new installation method for Sentry with Next.js allows users to set up their accounts or projects via the terminal by running a single command. This eliminates the need to navigate to the website and sign up, making the process simpler and more efficient. The `npx @sentry/wizard -s -i nextjs` command automatically sets up necessary requirements in the `next.config.js` file and creates other required files for tracking exceptions and latency issues. Users can test their configuration by triggering an error locally or deploying changes to start capturing data.