Copy to SD and boot into recovery - it should be one of the options in the power off menu, otherwise just reboot the phone while pressing the "volume down" button and use the bootloader menu to get into recovery. Note that in the bootloader you use the power button to select menu options, but once in recovery you use the trackpad (the switch has caught a few people out).
The recovery menu includes an option to install a zip from the sd card. Select that, choose the zip file, confirm you want to install and that's it. It also has options to wipe the phone, or wipe cache, etc. Geniunely, everything RM can do you can do from recovery (apart from download ROMs, but you can download these directly from XDA and get a better choice that way). If you get stuck in a boot loop again, pull the battery out, boot into recovery and wipe. If that doesn't work, back into recovery and either reflash the ROM or restore your nandroid backup from recovery (recovery also takes and restores nandroid backups). That's what recovery's for - so you can recover from problems.
For power saving you could try reducing your max clock speed with screen off a little. But it'll probably be more effective to try a different kernel. The phrase "ManU kernel" in my sig is a link to EViollet's XDA thread, and a lot of us here have used his kernels with CM, MIUI, Redux (1.2, not 2) and dGB ROMs. You flash a kernel through recovery like a ROM, but don't wipe the phone first. Do take a nandroid before flashing anything.
These kernels are based on a more efficient version of the linux kernel with a few power-saving features added. I'd suggest either the 1.4 or 2.1 HAVS-AXI-128-CFS versions (not all phones get on with HAVS - Hybrid Adaptive Voltage Scaling - though the 2.1 version should work with more-or-less any handset). The kernel is part of the ROM, so if any problem a nandroid restore or reflashing the ROM (without wipe, as you aren't changing ROM) undoes a kernel change. But I've been using this series of kernels for more than a year now, and have found them very good.