You can still do it, but it's a little more complicated. You have to use a file manager to delete the old Swype files first. When I did it, I used Root Explorer, but you can use any file manager that has root access.
There are a few steps to follow to get rid of the old one, then you can install the new one.
1. Change keyboard to default Android keyboard. (or anything other than Swype)
2. Delete (using a file manager): /system/app/Swype.apk
3. Delete (using a file manager): /system/lib/libSwypecore.so
4. Reboot phone
5. Use Swype Installer to install new version of Swype.
Hopefully this helps. It was a pain in the butt the first time I tried. I didn't know about having to delete the lib file.