I've changed my optimization routine. Some of the resources had to be removed and replaced. I'm also able to use the original .odex files and don't have to testsign the new apks.
In short, I still have all but one of the original HTC backgrounds built in (not important, but something I wanted to keep) and they are still at high quality. The file size hasn't changed much, but the performance has. This isn't too important now, but with Android 2.x the Hero LCD is supposedly going to be able to display in it's native color depth (262k) and should make a huge difference in looks.
Or maybe I'm crazy. In any case Sense runs better on my phones, especially the transition between screens. It looks 99% the same, I had to change the launcher bar a bit because some of the files would not optimize enough for my tastes.