So at this point if I wanted to go voodoo what do I do? delete the voodoo/disable_lagfix folder from the sd card and reboot? anything else?
Only if you wish to utilize those features.
Undervolted is undervolted. The purpose of it is to run the CPU at a lower voltage, usually with increased timings to maintain speed, to increase efficiency thus improving battery performance. Most kernels have other features built into them (which are listed) and this one is no exception.
The kernel may not be fully utilized when not used with it's intended file system. Seeing the blue characters like you mentioned is the first sign the install took. You can also tell with a voodoo kernel by checking the voodoo menu in CWM recovery. It would have been switched the lagfix status for next boot to enabled unless you manually disable it like it sounds like you did.