One advantage of App-V Sequencer is the capability of running via command line. This allows automating sequencing of app which don't require special customizations in guidelines or "recipes" for sequencing. The upgrading of a package can also be automated using command line sequencer.
Here're some other tips:
UPGRADE and OUTPUTFILE Must be Different
Command line sequencer willn't update a package if source path specified in /UPGRADE switch is same as in /OUTPUTFILE switch. This'll throw a sharing violation error.
DECODEPATH must be specified
Remember Upgrade option is same as "Package Upgrade" or "Opening a Package for Upgrade" in GUI version. This means the package has to be decoded into mount\VFS path.
OUTPUTFILE location needs to be on a separate drive as one specified in the DECODEPATH option.
If update is anything other than a standard MSI, it's recommended to contain it with a batch file or script. The command line sequencer should be able to grab everything even if it's a simple file copy or registry import.
More Info: documentation for upgrading a package