I assume you are meaning your sdcard? If so I occasionally just format my entire card the Android OS will recreate all neccessary folders as do the Apps just make sure you dont delete your pictures :blink:
Last question: Because I did an update.zip, did this write over the system files or create a second set? Should I do a factory data reset? I viewed a youtube video of a guy flashing the stock rom and he did that as a last step...