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Ok, I did these commands in terminal and it worked AFTER a reboot.
su
cd /system/app
sysrw
rm Gmail.apk
sysro
<rebooted> Wouldn't work before the reboot.
Then installed from market.
Yup, and that's why you have to remove the one in system/app. It installs in /data/app as com.google.android.gm-1.apk because god forbid it be easy to find.