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I wouldn't install the update with the gapps. If you want to install them, just do it the old-fashioned way. A couple people have messed up their machines because they are needlessly doing updates - unless you have a really good reason to flash your firmware, you should probably just stick with your old equipment.
Personally, I'd still flash to 2.2. My guess is that you'll notice even more speed improvements. I'd just stick with the official Ermine update.
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