Does upgrading system delete my installed apps and so on?

[#1]

I've got the Xperia Neo V and it has been showing the new system update notification since I bought it (which is 3 days ago btw), and I was wondering since it's the first time I'm dealing with an Android Phone, will my Apps/App Settings get erased if I update my system? If so is there any way to make any sort of backup or something?

[Nabeel · Accepted solution]

Backup and restore http://talk.sonymobile.com/message/92735

update however doesn;t result in deletion of data

but its good to backup