You appear to have them the wrong way around, it should be:

cpan> o conf mbuild_install_arg '--uninst 1'
cpan> o conf make_install_arg UNINST=1
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Similar settings in CPANPLUS are:

CPAN Terminal> s conf buildflags uninst=1
CPAN Terminal> s conf makeflags UNINST=1
CPAN Terminal> s save
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This does appear to be a third possible solution, but the CPAN perldoc makes me a little weary about it. Specifically: In fine tuned environments UNINST=1 can cause damage.

1)

    I installed a new version of module X but CPAN keeps saying, I hav
+e the old version installed

    Most probably you do have the old version installed. This can happ
+en if a module installs itself into a different directory in the @INC
+ path than it was previously installed. This is not really a CPAN.pm 
+problem, you would have the same problem when installing the module m
+anually. The easiest way to prevent this behaviour is to add the argu
+ment UNINST=1 to the make install call, and that is why many people a
+dd this argument permanently by configuring

      o conf make_install_arg UNINST=1

2)

    So why is UNINST=1 not the default?

    Because there are people who have their precise expectations about
+ who may install where in the @INC path and who uses which @INC array
+. In fine tuned environments UNINST=1 can cause damage.
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