Just install MC17. You don't need to uninstall MC16. In any case do not specify the MC16 install location if you want install MC17 to a custom location.
MC17 will copy the currently active MC16 library and most of the configured MC16 options. Some features may have changed fundamentally and thus have different or incompatible settings in MC17 (as jmone said, Theater View is one of those).
You can uninstall MC16 anytime, but I would recommend keeping it for a while.
EDIT
Before uninstalling MC16 you should back up anything you want to preserve from C:\Documents and Settings\[user]\Application Data\J River\Media Center 16\ (XP) or C:\Users\[user]\Appdata\Roaming\J River\Media Center 16\ (Vista or newer), e.g. cover art or library backup files.