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The need to uninstall before installing isn't something I've seen. Possibly something with the plugin updater. But I just installed 1.5.6, then used the updater to go to 1.5.7 and it worked perfectly.
@koland - I don't know how you were running 'both'. There would only be one icon and 1.5.6 and 1.5.7 have the same name. Now if you were running a really old version ('Create Kindle Collections', then you would have had to uninstall/re-install (although even that might not be necessary with the latest version of the plugin updater).
After restarting, check under Preferences->Plugins then User Interface plugins - and look for Kindle Collections. The version number is listed there (hmmm, I think I'll consider adding an About menu item to make this easier to check).
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