Here is an update. I took the bike to my LBS. And they could not make it shift nicely. It shifts horribly. We shortened the chain. We adjusted the tension. It shifts horribly. It seems that the problems are in the cassette. The cassette does not appear to rotate completely true. Also the new crankset is also slightly out of alignment. So perhaps its a problem with the parts. Options now include:
1. Change the capreo free hub to a standard free hub and put on a standard road 10 speed cassette.
2. Take off this new 10 speed cassette and the new derailleur and new shifter and return to standard 9 speed Capreo
3. Find an alternate vendor of 10 speed capreo cassette (but I am unsure who makes this - anyone?)
4. Make a 10 speed capreo cassette with a 10 speed ultegra or 105 and the bottom parts of the capreo cassette.

Welcome any thoughts.