If you want the older Visual Studio 2005 behavior of update via an uninstall of all the existing files followed by an install of all the new ones there is an easy way and a hard way.
The easy way is to change the install location so you don't go on top of the existing files, although a user could change this anyway.
The hard way - you'd need to edit the built MSI file with Orca.
1) Go to the InstallExecuteSequence table and locate the two actions InstallExecute and RemoveExistingProducts. Note that they are near the end of the sequence.
2) Delete the row containing InstallExecuteSequence.
3) Change the Sequence number of RemoveExistingProducts so that it is immediately after InstallInitialize, which probably gives it a sequence number of 1510. The number is not important. Immediately after InstallInitialize IS important.
4) Save the MSI file.
The point about RemoveExistingProducts being at the end of the sequence is that the new files are all installed on top of all the existing files subject to file update rules, then the older product info is removed. That's what makes it an update rather than an upgrade.