ALL google apps are now working correctly. FYI, I learned through the process that if you have to register through the youtube app, Gmail might not sync correctly and you may have problems with the market. This made my pocket edge 10000x more valuable...so give it a try!
I'll try to explain how I did it, I made so many changes it's hard to be sure what the fix was.
To do this the way I did, you will need a rooted phone with the 2.2.1 version of Google apps. This might work with another version of Gapps? Hopefully someone can find an easier method.
On the phone:
1) Convert all google apps to "User Apps" available in Titanium Backup Pro 3.8.1 by long pressing on the app and scrolling to the bottum. I'm not sure which files made it work, but GoogleServicesFramework and Vendor are important. I also did NetworkLocation, MarketUpdater, Gmail, Youtube and the rest.
2) Backup all google apps + data to mini SD card.
On the pocket edge:
1) Put mini SD card in edge and restore all google apps + data. You will need the pro version of Titanium Backup to use the fast install method. This was the main reason I used Titanium Backup was that some of the required files failed on using the package manager.
2) Now, convert all those installed user apps on the edge BACK to system apps. VERY important, took my awhile to figure this out. I suspect that google apps have to be system apps to work correctly.
3) Give it a try, if Market gives you an error, reboot and wait for a network to be connected, then try again. Go to the next step only if you have issues with it. You should be able to set up your google account through Market or GMail.
4) I also did the "Market Fix", which involves changing your build.prop with Root Explorer to include "ro.build.fingerprint=google/passion/passion/mahimahi:2.2/FRF91/43546:user/release-keys" A tutorial is found here: http://forum.xda-developers.com/arch.../t-861044.html
We might be able to find a fingerprint that more closely matches the edge?
Some of the apps still won't install (like Angry Birds), I suspect this is a hardware problem.
The titanium method may not be necessary if anyone wants to copy the gapps apks to the /system/app folder with root exploer and use another method to make it work.
Good luck everyone!!!