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Root reflashing new ROMs on older ones

I have a newbie question: I have CM7 build number 27. However, there is a newer build number every day... am i allowed to just download these newer builds and flash over them without erasing my cache and system, yet still keep everything working perfectly?

Can I reflash a newer version ROM on top of the old one and still expect al my info and everything to be there and workign properly?
 
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