Seeing Milford Sound by water is truly spectacular and most visitors opt for a boat cruise (though you can also kayak!)
I have done several Milford Sound cruises with various providers and really enjoyed the last cruise we did with RealNZ on their Haven Boat. The cruise was a great length, the boat is comfy and modern with lots of levels and balconies to view. It's also a mid-small sized boat which means smaller crowds and they get up close to the waterfalls and wildlife in the sounds!