Hi Mercy,
Both my Gypsy and my Create are up to date and running the most current versions. The current G build allows me to connect my Create and usually gets as far as loading the mat and starting a cut. Most of the time, it has been stopping in the middle of the cut and displays the same error message that is described above at the beginning of this post... every once in a while, I get lucky and it cuts perfectly without any problems. This began happening about two months ago (the end of April) both before and after any updates to either the Gypsy or the Create firmware.
I had reformatted my Gypsy to see if that would help my cutting/communication problems with my Create so I didn't have any files on my G, except for one that I created to test to see if the problem had been resolved. (I didn't want to waste my time designing several layouts that I wouldn't be able to use.) When I realized I still had the communication problem, I decided to try to figure out a way around the problem. So I thought maybe I would try to transfer a G file to CCR to see if I could cut from there. (Note: files weren't transferring before the update last week.) When I connected my G to Sync, I noticed they had an update available titled "software support" or something like that (can't remember exactly but I know it had the word "support" in it). So I ran that update (I don't have Imagine so I don't do those updates) and then went to Project Files. As far as I know, I didn't do the automatic backup. To transfer the files to the C Sync, I did it one at a time since I only had one on my G to transfer. I followed the directions for importing/exporting files on the CCR page (FAQ section):
http://www.cricut.com/craftroom/default.html. I didn't have to do the last two steps listed there since my "project" was already imported. I plan to test this out a little more in the next week or two... if you want, I can let you know what happens re: multiple files, etc.
The CCR program does not run slow on my iPad. If you're curious, I have the original iPad (not iPad2 or 3)and use an app called "Rover". This is basically an educational app (FREE!)that streams Flash content to the iPad. (We travel often and my daughter "goes" to school "online" so we needed something that would work with her school program and my iPad.) The app does have a tendency to crash unexpectedly on occasion, that's why I mentioned it's a good idea to save often. I just started using this with CCR (the web version of CCR) last week so I am still testing it out and finding any "glitches" it may have with CCR (ex: one time, I logged in to CCR on our PC to cut a design created on my iPad. I noticed the last layer in the project that I designed was missing.) I don't have an external keyboard - this app has an on-screen keyboard and arrows so it's not necessary... it's almost exactly like using a regular computer but using your fingertips or stylus to drag and drop instead of a mouse. I imagine an external keyboard could be used, but like I said, I don't have one so I don't know for sure. I still like using my Gypsy when I don't have a wi-fi connection to design on my iPad, but I'm not missing the wasted time and frustration of trying to get it to cooperate with my Create. I also enjoy logging straight into CCR and my files being there already. So, for the time being, I'm using both depending on where I am at the time I want to design.
Sorry this reply is so long... just wanted to make sure I answered your questions well enough for you to understand. Let me know your thoughts... =D