Some people are getting confused about mounting the system. Some are getting confused about radio error.
Mount your system before doing anything. Whether tghatg would be following my instructions to flash CM7 off another ROM, or flashing nightly. Its due to the Dalvik cache needing to be wiped thoroughly. And also when flashing to CM7 from another ROM, GB leak, or whatever, I would strongly recommend you mount your system first.
If you get a radio error, like ldopa showed, reboot AFTER your phone has settled down at the home screen. If it persiste, follow this method...
- have latest nightly and put on root of sd card
- have gapps and put it on root of sd card
- boot into Recovery via Power Button method
- mount system
- wipe cache partition
- wipe dalvik cache
- flash latest build
- flash gapps
- reboot
You should NOT get a radio error after that anymore.
Lastly, not to forget to mention, as ldopa said it right... it doesn't hurt to mount system. The files will be respectively installed in their correct folders and parent folders. Even if there isn't any system files (/system/...) from the zip you're flashing, it isn't going to mess anything up.
One more thing, make sure you do not have an existing update.zip on the root of your sd card before you put the new update.zip on there.
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