I haven't done any testing to know what happens if you try to install overtop of an existing installation from a previous version.  I am not optimistic that it would be a good experience.  I always uninstall first, then install the newer version.

The new .exe installer can install to a non-standard location.  I will note that one shortcoming of installers made with InnoSetup is that it will prompt you for admin privileges to do the install regardless of where you install it, even if you're only installing to your user directories.  InnoSetup installers can be made to install without admin privileges, but if created that way, they are unable to prompt you for admin privileges to install to Program Files or other protected directories.  It's not ideal, but it's significantly more reliable and then Installer Projects (.vdproj) feature we had been using, which was removed from Visual Studio.

If you need to install to a user-owned directory, I would suggest using the portable install package instead, and simply unzip it to the directory. 

Micah Snyder
ClamAV Development
Talos
Cisco Systems, Inc.