The thing is, rpm thinks the package is installed since it says so in its database. Perhaps it's possible to "upgrade" using
rpm -Uvh filename.rpm? I haven't used rpm-based distros in a while so I realize I'm not too much of help to you.
Perhaps you should direct your query to the distribution-specific subforum here that suits your installation.
The $PATH variable is most likely set in /etc/profile but it could be somewhere else too (/etc/sysconfig rings a bell?). But no, it doesn't actually hurt to have a non-existing directory in your $PATH, it's just a bit annoying.
Håkan