This article about the iPod touch explains how the iTunes can be used for back up, restore, and update your iPod touch. In order for you to get the best results possible, always ensure that you have installed the latest version of the iTunes and it is running well before you attempt to update, restore, and make a back up on your iPod touch. Remember that your iPod touch is backed up by the iTunes every time you sync your iPod touch with iTunes, update your iPod touch in iTunes, and restore your iPod touch in iTunes.
Your downloaded applications, photo, and video content of your iPod touch are not automatically included in your back up although you can be sure that most of your iPod touch settings are included when you do the back up.
When you restore from the iTunes backup, your iPod settings, video, audio, and photos will then re-sync to your device because the option “Sync” under its respective tabs will automatically checked in iTunes when you restore from backup. However, if you choose to do the restoration using a new user, then the downloaded applications, video, audio, and your photo content will not be “sync” until you choose the “sync” option in the iTunes.
Furthermore, with the 2.0 software of iPhone and the 7.7 iTunes or later, manual back up or restoring are required. Just click the “back up” or “restore back up” icon from the iTunes window on its left side and then control click or right click it.