I\'ve upgraded a [.vdproj MSI generator project built into VS2008] System.Configuration.Install.Installer with a ServiceProcessInstaller
and a ServiceInst
This should answer your question
How do I eliminate "The specified service already exists" when I install new versions of my software?
Does your service (setup) provide a custom action for uninstalling the service?
An upgrade means that the previously installed product get uninstalled before the new product gets installed. I think the reason for the error is that the old service cannot be removed.
If your service is written in .NET you might find this article useful: http://www.codeproject.com/KB/install/InstallService.aspx