I have a Visual Studio 2010 Deployment Project with the following settings:
DetectNewerInstalledVersion = True InstallAllUsers = True RemovePreviousVersions
Had same issue with couple of setups migrated form 2005 t0 2010. Edited setup (.msi) file with ORCA and changed the Execute Sequence. RemoveExistingProducts before InstallInitialize This has resolved the installation issue.