>Maybe the new VirusScan installer (VSEsetup.exe) should warn if Microsoft Security Essentials is installed like it does for Windows Defender
A very good recommendation.
The information used by SetupVSE.exe for detecting incompatible software is contained within our Uninst.ini (and supporting .DLL).
This information only has an opportunity for being updated when we repost our product to the download site. The next repost is not planned until Q1, 2010 after we release Patch 3.
Until then, VSE is not going to know about MSE.