Question
How do I prevent a file from installing if the file already exists on the destination computer?

Answer

Do the following:

1. Add the file to your package.
2. Go to the Setup Editor and select the Tables tab. Find the file in the Files Table and make note of the component name in the Component column.
3. Select the Components tab and right-click on the component name.
4. Select Details; the Component Details dialog appears.
5. Mark the checkbox option to "Never overwrite if keypath exists."  In addition, make sure that the file is the keypath of the Component in the File Key Path field.
6. Click OK.