I have an iPod touch (not mine) connected to my PC (authorized and linked to the same account of the iPod's owner). The thing is configured for manual sync, current music and apps are on a different PC. Will updating the OS erase music/apps? If so how can I backup them before? Right clicking on the iPod and selecting "Backup" runs too fast, I don't think it copied the whole 3Gb over.
As commenters above suggest iTunes will only backup configuration files and whatnot. All content is supposed to be available in the iTunes library with which the iPod syncs, so iTunes will happily erase it, leaving to you the "burden" to restore stuff after the update. In my case I solved the problem using Sharepod to get content off the iPod before updating.