I tried to do the update on my ipad 2 and now it's telling me I have to connect to itunes which says it's in recovery mode and i need to restore it to facroty settings which will lose all my stuff?  Is this so? and if so, why did it do this?

Tried to update, screen said verifying update.  then said to plug into itunes.  itunes (on home PC) said ipad was in recovery mode and I need to restore to factory settings to move ahead, losing all my stuff.  Obviously traumatic. Do I do this?  why did this happen?

The best way to backup your iPad is the way that makes the most sense in your situation and the way that works best for you. There is no hard and fast answer.  But since you asked .....
I prefer using iTunes because I don't have to worry about having enough space available in iCloud. You are allotted 5GB of space with the free iCloud account, but that is really not that much storage space at all. You can purchase more space, but IMO, its crazy to pay for cloud storage if you have your own computer. On top of that, you have more control when you use your computer. You can backup the content on your computer in order to have backups of backups. You can't do that with iCloud. Another disadvantage to using iCloud is that you always need to be connected to WiFi in order to backup to iCloud. Not everybody always has access to WiFi every minute of every day.
Read this and see if it helps you make your decision. If you have more questions, post again and ask.
iOS: Back up and restore your iOS device with iCloud or iTunes

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