Personally, here is how I handled this problem.....
When I repack the legacy setup into an MSI, I check all the files and InstallShield project files into a source control system and run it through build automation to create the output MSI.
I author the ISM with a Major Ugprade since I can't go worrying about component rules since I don't control what practices the outside vendor will follow when sending me a new release.
When I get the new version, I do a quick repackage just to grab the updated files and I give it quick yet thorough once over to see if the design of the install changed. If not, I just drop the files into source control, update the build number and ProductCode and rebuild. Then I use SMS to test a clean install and an upgraded install on top of the previous release.
Sometimes minor changes ( maybe new files or registry keys ) may be seen, sometimes it's a complete rewrite. Eitherway at runtime it's a non-issue because the same advertisement will handle either scenario.