Happily means it runs smoother with less wait time for many things like viewing mail, opening a new chapter in a book, menus etc.
The steps were:
1) setup fastboot on my mac
2) obtain a suitable recovery image (to flash the cynogenmod ROM) I used clockwork-recovery-image
RA-sapphire-v1.7.0 is also said to work
3) downloaded and copied the cynogenmod ROM to my sdcard (and the google apps one too) after verifying their md5sum
4) Enter fastboot mode by holding down the back key while booting. Then, from a terminal on my mac, run:
./fastboot erase cache
./fastboot erase userdata
./fastboot flash recovery recovery-clockwork-22.214.171.124-sapphire.img
5) reboot and hold down the HOME key while rebooting to enter recovery mode
6) ran a backup from the recovery options
7) choose to load a zip from the sdcard (recovery option) and select the update-cm-5.0.8-DS-signed.zip
8) rebooted into 2.1 and set up my wifi (I've no data plan at the moment)
9) rebooted into recovery mode (HOME key) again and installed the google apps by choosing-a-zip-from-the-sdcard (recovery option)
10) rebooted and set up my google account
*I don't know the effect of installing the cynogenmod ROM and google apps at the same time.
*My radio image was HTC standard from 1.6
*My menus were all Japanese but I changed that to English (somehow). I'm in Tokyo so it makes sense I guess...