When installing the StrataFrame_Setup.exe 1.6.5 will this remove the previous installation?
As Hugo mentioned, it will automatically remove the previous version.
Is there any special procedure to upgrade current projects to the new version?
We have left the assmebly version the same and only changed the file version (so we can tell which version you are running). So there is really nothing that you have to do past installing the update. There are some additional upgrade instructions in the documentation once you have the install loaded.
Can I have both version 1.6.5 and 1.6.1 running so old projects can be upgraded at a later time and new projects be created under 1.6.5?
At present, no. This is something that we will consider in the next major version of SF so that you can have different versions running, but it is pretty complicated considering the BO Mapper, etc. being able to run different versions.
Is there any documentation listing all changes/enhances included in the new version?
Tons...load the update and then open help!