The User Import Framework (uif) module provides simple, extensible user import via CSV (comma-separated value) files. The guiding philosophy is to make the import process as simple as possible for the end-user (the user doing the import). Hooks allow the developer (you) to add the bells and whistles you need, e.g. content_profile (D6), core user fields or profile2 (D7) support, while providing a framework which takes care of the tedious aspects of the job (forms, input parsing).
User import is a two-step process. 1) The user chooses a csv file, along with specifying the number of records they'd like to preview. The user can also choose whether new users get a welcome email. 2) If happy with the preview, user submits the form again and users are created (or updated, if a user already exists).
User Import Framework uses the Batch API to avoid timeout and out-of-memory errors during import.
Alternatives
Migrate module (http://drupal.org/project/migrate) is a robust and thorough implementation of data migration that handles users, nodes, and any other type of content from a variety of sources. It is flexible and well-maintained. If your requirements are involved or the user (perhaps you) is technically proficient, this is a powerful user import solution.