Updating and restoring iPhone software

You can use iTunes to update or restore iPhone software. You should always update iPhone to use the latest software. You can also restore the software, which puts iPhone back to its factory condition.

If you choose to update, the iPhone software is updated but your settings and media are not affected.

If you choose to restore, all data is erased from iPhone, including songs, videos, contacts, photos, calendar information, and any other data. All iPhone settings are restored to their factory condition.

To update or restore iPhone :

Make sure you have an Internet connection and have installed iTunes 7.3 or later from www.apple.com/itunes. Apple recommends using the latest version of iTunes.
Connect iPhone to your computer.
In iTunes, select iPhone in the Source pane and click the Summary tab.
Click "Check for Update." iTunes tells you if there’s a newer version of the iPhone software available.
Click Update to install the latest version of the software. Or click Restore to restore iPhone to its original settings (this erases all data on iPhone). Follow the onscreen instructions to complete the restore process.
Restoring or transferring your iPhone settings
When you connect your iPhone to your computer, settings and other information on your iPhone are automatically backed up to your computer, including mail settings, text messages, notes, call history, contact favorites, sound settings, and widget settings. You can restore this information if you need to (if you get a new iPhone, for example, and want to transfer your previous settings to it).

To restore previous iPhone settings:

Connect the iPhone to the computer you normally sync with.
In iTunes, select the Summary tab and click Restore (this erases all data on iPhone). When prompted, select the option to restore your settings.
Notes:
Some information you can sync (photos, videos, songs) are not backed up and will need to be resynced.
Passwords are not backed up and will need to be entered again.
If you restored to a different iPhone, you will need to reactivate Visual Voicemail.
Deleting backups
If you need to delete a backup from a computer, follow these steps:

Open iTunes Preferences:

Windows: From the Edit menu, choose Preferences.
Mac: From the iTunes menu, choose Preferences.
Click iPhone (iPhone does not need to be connected).
Select the backup you want to remove and click Remove Backup.


Note: If you don't want iPhone to automatically sync, select the "Disable automatic syncing for all iPhones" checkbox. For more information, see Help in iTunes.


Article source:http://docs.info.apple.com/article.html?artnum=305744