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If your library is on the external SD card then it will remain there through the update, or you can take it out to be sure. If it is on the internal sd card then, unless you can copy it to a computer I am afraid it will be cleared and you loose everything not backed up externally.
Since I have never been interested in the market and the other g-apps I've never applied the EE allmine so I have no experience on what it might do to the library. The only advice I can give is to make sure you have everything backed up to your computer first so you will be able to restore if necessary.
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