I'm not familiar with grade replacements for any program - do you mean that they will just consider the grade you got the second time around and disregard the first one?
In general, I would say no. They'll likely be looking at your current GPA along with all your grades. I understand your frustration with this and this is why crafting your personal statement as true to your story is so important - your struggles are revealed there. Dips in GPA and particular experiences that have set students back for XYZ reasons are why applications are reviewed hollistically. So while it is an important factor, it is definitely NOT everything. I would definitely focus on the parts of your application that you have full control over, like PS, and the rest you can't really do anything about.
If you have been offered an interview, you can probably go more in depth if you are asked about it or just talk about it in general if you feel the need.
