I am trying to upgrade cufflinks version from 1.3.0 to 2.0.2. I changed the directory in the PATH to version 2.0.2 but when I run cuffdiff on the galaxy it still uses the version 1.3.0. Do I need to change the code of the wrapper?

This is the right approach, but there must be a glitch somewhere. If you're running Galaxy on a cluster and/or via a dedicated user, you'll want to set the PATH accordingly. For debugging, you could try echoing the path in the tool wrapper.

Another question is how to I enable both version of cufflinks to appear and run on the galaxy?

This isn't possible now but will be in the future when Cufflinks is moved to the tool shed. Best, J.