The new Watchtower Framework replaces the old one. The new application replaces the old one too. The framework lives at /Library/Frameworks/Watchtower.framework; the new framework overwrites at this location on your Macintosh system hard drive. The new application overwrites the old at /Applications. Though, in fact, you can store the application anywhere and have multiple versions if you really want to, but I don’t recommend that.
Once installed, you do not need to reinstall libraries when upgrading. The new software will update and reuse any libraries already installed. Individual libraries install under Library/Application Support/Watchtower Library relative to the user’s home directory. Upgrading does not delete this. Your libraries, research favourites and other settings remain!
X11 installation only applies to Leopard 10.5!
Provided you do not launch the application, order does not matter. Please make sure you are not running the application when installing however.