What happens when I reset my iPod?
Yes, you will lose all your settings. That is the whole purpose of reseting a device. If instead, you just want to restart your device, you hold the Sleep/Wake button and the Home button at the same time for at least 10 seconds. For clarification: Reseting will erase your data, restarting will not erase your data.

The easiest way to backup an iPod Touch these days is to use iCloud backup. Apple has all the directions on this page. Basically all you do is go to Settings > iCloud > Storage &amp; Backup > Backup Now.

Then once it's done with the backup (it may take several hours), you will be able to use it to restore your device. Restoring all the data is simple as well. All you do is choose the Restore from iCloud Backup option when it asks you to set up the new device.

Make sure you keep your username and password for iCloud in a safe place, because you will need it again after you restore your device.