Not sure if this is the case with every ROM used, but this was posted at the CM Forums:
To follow up on my previous posts, read post by roselindo and related post over on DroidForums. Attempted that method (rolling back to CM6RC3 with wipe, followed by CM6Stable and Theme) with no luck. However after reading posts on other themes that discussed the lack of available space in the /system partition with CM6, I rolled back to CM6RC3 with NO Gapps and a wipe, upgraded to CM6Stable with NO Gapps but NO wipe, and then dropped Watermark'D theme on it with NO wipe. SUCCESS! Installed Gapps through ROM manager with NO wipe. At this point went to recover apps with Titanium Backup. (Oddly could not restore 3 apps and am still working on that issue.) Had the whole theme except for the Gapps I had installed separately, so re-installed them with NO wipe and got the missing gaps in the theme.
Hope this helps
I do know the UD7.0.0 ROM is huge, so that may be what is causing the issue. I will look into removing some images, to get the file smaller. Maybe me adding FBook, Twitter, a couple others threw you guys over the size limit. I guess I found out what I am doing this evening... haha.