Yes, it's possible. I am not sure if it's the right way or not. If someone has something better please let me know.
I set one launch condition and 2 registry search
First reg search searches for this key for 32 bit OS - SOFTWARE\ESRI\Desktop10.1 with property name, IS32AGS101 Second reg search searches for this key for 64 bit OS - SOFTWARE\Wow6432Node\ESRI\Desktop10.1 with property name, IS64AGS101
In the condition property of the launch condition I do something like this, (IS32AGS10="10.1" OR IS64AGS101="10.1"). What you are doing is checking if the key value 10.1 exists. If so then let the install continue otherwise display the custom message and stop the install. Hope that helps.