Can I update an existing Apple ID with a newly created MobileMe email address?
As I have attempted to do this myself, Im pretty sure you cant combine the two. You can try contacting Apple Support but they will probably tell you the same thing.

Apple doesn't allow you merge AppleIDs or in other words use a mobileme AppleID for an iTunes account AppleID ( AppleIDs are just the username/email address I think). This sounds reasonable though because mobileme is a  yearly paid service and in the instance you canceled the mobileme account, it might lead to account problems (ie if you needed to reset your password for your iTunes account but it still had the mobileme email address as the AppleID/email)

You should still be able to make iTunes purchases, app purchases, etc with the original iTunes account you had set up.