tntc.tig, have you altered anything in /system? Like freezing/deleting stock apps? If yes - you need to restore them or update won't work. Root is not the problem.
You were absolutely right. I completely forgot that I had renamed /system/app/Blockbuster.apk to Blockbuster.apk.bak and Quickoffice.apk to Quickoffice.apk.bak. Restoring those allowed me to complete the update normally. I had to re-root with z4root, but that worked out just fine.
I ended up using Root Explorer to do all the renaming. Works perfect, and now I don't have Blockbuster or the non-purchased version of QuickOffice on my screen.
It was a very wise decision of yours to rename them instead deleting them. Effect is the same as deleting (they get uninstalled), but shall you need them back - you get them up in no time. You can always rename them again after the update if you like it this way (uninstalled).