You'll want to put your iPhone in DFU mode before doing the update via iTunes. That'll assure you have a clean restore. As far as saving information on your phone now.... Many, including myself, recommend setting your iPhone up as a "New Device" when updating from iOS 4.x to iOS 5.x. This, of course, will wipe any information you have stored... contacts, pics, notes, etc. Pics are simple to save. Plug in your iPhone and move them to your computer. Contacts... back them up to an email account via iTune sync.