You still need a FAT32 partition for your photos, music etc.
Have at least a 512MB ext4 partition (no need for two), and leave the rest as FAT32.
You don't need to copy all of the contents of your original 4GB card, just the personal files you want to keep, and whatever app data you've backed up to SD i.e. not the folders like 'android', 'secure', or 'data'. You can trash most of the application created folders too.
Unrevoked and CM7 would be a good way to go. When you boot into clockworkmod, make sure you do a full backup and a full wipe (cache, dalvik, system) before you install anything.