I have installed Virtue Mart 1.4 and I am using JMS 1.2.8. I have just noticed that the JMS then required new patches to be installed. But when I tried to install the patches, I get error during installation of the files for virtue mart.

I found a post in this forum that says I should not have installed Virtue Mart 1.4 if I have not upgraded my JMS. The post is www.jms2win.com/forum?func=view&id=2318&catid=25#2318

So, what should I do now? Is it okay if I uninstall the Virtue Mart and then upgrade the JMS and then install Virtue Mart?

If you had a look in the FAQ change log, you will have saw that a new patch is delivered for VM 1.1.4. See chagne patch history 1.2.14 www.jms2win.com/faq/patches-definition-v12x
So update your JMS 1.2.8 with latest 1.2.12 that include the latest patches definition.
See FAQ for the procedure.
www.jms2win.com/faq#sec-122