Here are some examples of conditions that can be placed on custom actions:http://www.installationdeveloper.com/3492/common-conditions-used-in-msi-installations/I would suggest creating a verbose log tho to see if the condition is not being met or if ...
you can only rename components on a major upgrade. This performs a full uninstall. To answer your question, yes you will have trouble updated an existing installation.
Can you build outside of visual studio? Try setting up a new test project to see if you are able to get it to build. Try launching Installshield directly. Can you build in here?
