Will a nandroid backup save me from a bad upgrade? I have a Rezound on 4.03, and verizon has pushed an update to it today. I have delayed the install because there's little information about it. What little I have found claim it make the phone unstable.

I made a nandroid backup, with the default options. That means:
[Boot], [System], [data], and [cache] were selected.
[recovery], [sd-ext], and [.android_secure] were not selected.

My question is, if this OTA update does make my phone worse, will simply restoring the backup pretty much guarantee a seemless "undo"? Or is it possible the update could change something that I can't revert?
An update might include a new radio-firmware (see: What is radio firmware?; basically you can think of it as the "hardware-layer" or an API to give the installed (Android) system access to the hardware), which is not included with a Nandroid backup. It could also include a "recovery-image" (see: recovery-mode), which you did not include with your backup.

For the latter, you could simply include it with your Nandroid backup. The radio-image is a different thing: I know of no method to extract/backup it from a given device. You could, however, check which radio version is currently installed with your device, and see if you can get a "RUU" (Radio Unit Update) specifically for that.