EDIT: Fixed it!
You can't use the 'update.zip' method you have to do a full update/restore via nandroid backup (sprecovery or whatever other backup program you installed). I haven't used Sholes ROMs but I know the BB ROM specifically has directions for that method:
AllDroid - View topic - [ROM] Bugless Beast V0.7.4 (Update Available) 2/7/10
You are right to be wary. There is much bullcrap. Be wary of me too, because I may be wrong. Make up your own mind after you evaluate all the evidence and the logic. - Mark Rippetoe
You have to do a nandroid backup to return to the sholes ROM. Just boot into sprecovery, backup/restore, advanced nandroid restore, choose rom, make sure to select everything, perform restore, reboot and done.