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I went straight from 1.6.5 to 1.7 also. I booted to HBOOT and then went into recovery. Wiped only cache, dalvik and system. Flashed the ROM and sat back. Automatically rebooted to HBOOT, asked for a yes or no confirmation, pushed the power button and voila!
The only thing I noticed different was that on the last reboot, the phone actually shut down. I waited for what seemed like an eternity before I decided "What The Hay" and pushed the power button. Phone rebooted like it had been waiting on me the whole time.
I also swapped extended batteries with the local Verizon store yesterday so this will be interesting, breaking in a new battery with a new ROM.
Everything seems to be working just fine. In fact, the phone itself seems a little faster using Sense.
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