Upgrading Unrevoked Desire from Eclair to Froyo
If this is a standard OTA update then you shouldn't lose anything at all, and the update should take less than half an hour, just make sure that your battery is fully charged before you start. All your apps, data and configuration should stay. The only exception to this is where things have changed between Eclair and Froyo, so some of your apps may not be compatible with Froyo (though it's been out long enough now that's very unlikely).

Yes, you will lose your root status, but should be able to root again afterwards, provided your chosen root method works on Froyo, or you can find a different rooter that will work if not.