Can't install from market: INSTALL_FAILED_DEXOPT
When I rooted my G1 and was using Cyanogen and we had a similar error we didn't need to reflash the rom, but just the gapps package - try reflashing that. Or other wise on AndroidPolice they have the latest market apk file which you could download and trash flashing that and seeing if that will install over the current market.

If that still doesn't work consider reflashing the ROM and GAPPS package again, but make sure you wipe before flashing. I always found that doing a wipe before each flash made for far fewer issues and errors. 

Case in point is my wife is using my G1 running Cyanogen's 2.2 version of Android and has been up and running for the last 6 months and we haven't had any crashes or errors yet on it, and I made sure to do a wipe and clean install when loading it.