Upgrade a Windows Service without Uninstalling

I've done this with WiX, which generates .MSI files using the ServiceInstall & SeviceControl commands:

<Component Id='c_WSService' Guid='*'>
    <File Id='f_WSService' Name='WSService.exe' Vital='yes' Source='..\wssvr\release\wsservice.exe' KeyPath="yes" />
    <ServiceInstall Id='WSService.exe' Name='WSService' DisplayName='[product name]' Type='ownProcess'
                    Interactive='no' Start='auto' Vital='yes' ErrorControl='normal'
                    Description='Provides local and remote access to [product name] search facilities.' />
    <ServiceControl Id='WSService.exe' Name='WSService' Start='install' Stop='both' Remove='uninstall' Wait='yes' />
</Component>

This stops the service, installs the new version and re-starts the service.

I do not use Visual Studio setup projects, so I might be wrong, but it seems it has no support for the ServiceInstall and ServiceControl tables which are standard features of Windows Installer. Those two tables are specially for installing and updating services....

Wix does support it (see this example), Maybe you can create a merge module, and use that in your project.

Otherwise this might help: Installing Services with Visual Studio (Phil Wilson)