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Your contacts are linked to your gmail account, so you won't loose them. I would sync them before just to make sure. Your apps are also linked the same way. Both will load when you sign back in to your account. Making a backup in recovery or Titanium wouldn't hurt. If you use LauncherPro or ADW you can also backup your home screens. Makes setting up your phone easier.
As far as contacts go, I've never had a problem with them not loading. All my contacts r linked to my gmail account, not the phone account. So on start up when i set up the email, all the contacts load. However, i've had problems with all the apps loading. IDK y, but for some reason Only the ones I paid for load, none of the free ones. *shrugs* not a big prob since it's the free apps, so I never bothered to figured out y lol.