Can anyone explain how traffic flows with the ECLB setup. I am not understanding how traffic flows and if the user gateway vlans should be on the switch or on the IPS. Thanks.
While it is called Load Balancing, it is really load splitting. The ELCB hashs the source and destination IP address and send that packet down one of the available paths (in your link there were only two, but it could be more). This can cause some less than even load balancing, but it's usualy close enough.
In your link, the IPS was bridging the two VLANS, so traffic had to flow thru the IPS to get from the hosts to the gateway. To answer your question, both the switch AND the IPS need to have these VLANS configured. The IPS will be configured as a VLAN Pair. The switch will have two seperate VLANS configured.