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It is my understanding that when a game updates, the file you download replaces the part of the code that the update fixes, so yes, the 800MB download will replace/overwrite the previous 800MB update.
I'd recommend getting a larger memory card if you plan on joining PS+ at any point in the future. I have a 32GB card, and I already need to swap out games on the card as they become available. I currently have about 3GB free.
The size of the cards is why I prefer physical copies of all my Vita games.
That is what I was planning to do before the Vita's participation in PS+ (which I had before the Vita even came out). I started out with an 8GB card, and figured I'd stick to physical games. Then PS+ happened. PS+ does NOT have a physical media option.
-Uncharted: Golden Abyss (which I already had the Platinum) - 3GB
-WipeOut 2048 + HD/Fury addon - 2.3GB
-Ninja Gaiden Sigma Plus - 2.1GB
-Gravity Rush - 1.4GB
-Disgaea 3: AoD - 2GB
So yeah... if you get PS+, a larger card is pretty much required, and even with a 32GB card (which I bought through Amazon for about $60 a few months ago), I will soon be needing to swap out games with Content Manager.