1. You can go from 1.7 stright to 1.8. Mind that there also 2 patches for pdfreader that should be applied. And read the instalation instructions for patches carefuly as the procedure is different from firmware update.
2. The dictionary was removed on request of users, I guess. So, it is not part of instalation in newer versions of firmware. But you may add Stardict dictionaries of your choice, so it should not be a problem to install it as aditional dictionary.
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