That’s how I do it. Shut down Eclipse, erase the ME dir, install new version, start Eclipse back up.
Additionally you could unzip the new version of Eclipse to a new directory, and load Eclise and Disable the old MyEclipse, restart then add the new MyEclipse via the Extensions method under “Manage Configuration”. And when you are sure that everything is working, you can shut down eclipse, and go erase the old MyEclipse dir and it will be removed from the Eclipse extensions list.