To answer this properly.
- Plug iPhone into computer with iTunes open.
- If the pop-up saying new software available pops-up: hit cancel.
- Hit the Sync button in iTunes (this SYNCS data missing on iTunes on your computer & vice-versa,
and BACKS-UP the device).
- When that's finished, hit the install of the iOS version (5.1) update again: this takes a while to download and a while to complete whole installation process
(- as part of this installation process, the final bit of it involves the data/settings from the previous backup it did above, then being installed on the new OS. So everything should be back to how it was before you updated the iOS software.)
- Finally check all is OK, and just hit the eject button in iTunes next to your iPhone.
So you shouldn't have to do any special backups yourself, as iTunes does that every time you connect it to you computer and sync, anyway. If something goes wrong, you can always get the backup saved in iTunes on your computer to reinstall
everything how it was previously.
Notes:
- Post-5.x being installed, from then on you can install new "delta" iOS updates directly on the iPhone without plugging into computer (via Setting > General > Software Update). These will be quicker than before (where the WHOLE new operating system had to be installed on the device [plugging iPhone into computer still does this as post-5.0, as a just-in-case option Apple have left in place]), as deltas are essentially just the small *extra* bits for the new functions that are on the OS updates.
From 5.0, you have two more options for sync/backup...
- Firstly, you can choose to sync to either you Computer or iCloud.
- Secondly, you can choose to sync over USB or Wi-Fi (the latter, only when iPhone plugged-in to power).
Hope it helps.
I have to say, all this "data management" is starting to be right pain to deal with, and the iCloud options are half-baked.
eg. Can't buy more than just 50GB (+5 free = 55GB total), even though I have a device that stores nearly 64GB, and expensive per GB anyway at £1.40/US$2.00 per GB per year!** So currently makes user decisions more complicated than they should be on just what gets stored where.
** for comparison, I just bought a WD 6TB (2x3TB) for £350 = £0.05833/GB (yes just **6 pence** per GB, and not just for one year either!).
(this one [but cheaper from non-Apple supplier!]:
http://store.apple.com/uk/product/H5857Z/A/Western-Digital-6TB-My-Book-Studio-Edition-II .)