The Environment variables view in InstallShield Editor is based on the functionality in the Environment table. Here is the documentation for this table:
http://msdn.microsoft.com/en-us/library/aa368369(VS.85).aspxAs you can see, unfortunately, there isn't any functionality available where you can do a find and replace on a portion of the existing environment variable value.
You could have your updated path be prepended to the beginning of the PATH environment variable and leave your original path still in there. However, this is probably not advisable because you would probably want to keep system paths at the beginning of the path and wouldn't want a situation where the new application ends up using a file in the old application path in a rare situation.
Perhaps the only solution is to implement a custom action that does the string processing necessary to remove your application's old path string from the PATH env variable. For example, you could set a MSI property using the syntax [%PATH] to get the existing value of the PATH environment variable in a property. Then you could use a VBScript/MSI DLL/.NET DLL custom action to strip out the old path from it. Then you can use the Environment Variable view to use the property to set the PATH env variable.