Good morning Jim,
First off, are you using Dreamweaver 4, or Dreamweaver CS4?
As for your questions;
1) You should always uninstall the previous version of an extension before installing a new version of it. You can uninstall what you have, and reinstall the newest version.
2) If there are files you want to clean up on the server, you should access the server through an FTP or Dreamweaver's built in file browser, and delete all unwanted files prior to creating new files through the extension. This should prevent any confusion. Not all files created are automatically put to your server though, and once creation is complete, all created files should then be put to the server ( the little up arrow in your file list ).
3) Once all files are put to the server, you will need to run the installer before you can use the CMS admin. Access install directory on your server in a browser, and the follow the installation steps. This is where you set up admin credentials. After that, access the admin directory on your server in a browser, enter the credentials you configured, and you're good to go.
