My favourite one, which I use extensively for the Arabic class is called Scheherazade. You can download it from the following site.
Once downloaded, extract the contents of the zip file into some folder. Double click on downloaded file (ScheherazadeNew-Regular.ttf).
A dialogue windows will open and there will be a button to install the font as shown in picture below.
Please note that if you share your MS Word documents or Powerpoint presentations containing the new font, e.g. Scheherazade, with someone who does not have the same font installed, they will see the text in some default font. Most of the time, it looks quite nasty. While asking the other user to install the appropriate font is one solution, you can also save your documents as PDF and share those. In that case, the other user does not need to install the font.
Here is a sample of the various fonts, mentioned above. Font size of 28 was used for the Arabic script.
Hope it was useful information. If you know of other good Arabic fonts, please share.