Update multiple iphones to 5.1.1 on 1 iMac.

Update multiple iphones to 5.1.1 on one iMac.
My daughter runs her business email through MobileMe. She updated to iCloud and no longer receives mail on her iPhone. We understand that she needs to upgrade to iOS 5.1.1 is this correct?
My daughter's Macbook is broken and is away being assessed (probably unusable). She urgently needs to receive mail etc. (She is a self-employed performer and depends on her mail and has over 1200 tunes). If she updates on my iMac will she lose her iTunes music, photos, contacts and apps?
How do we avoid this?
Do we need to back up her content first? If so, how?
Do we handle contacts differently to the iTunes items?
In short, 1 iMac, 2 iPhones - my iPhone is updated to 5.1.1, can we update my daughter's to 5.1.1 without wiping her content?
We have attempted to update her iOS but the warning message lead us to believe it was not possible without wiping it. We have also read several discussions with conflicting answers.
Can anyone help? Many thanks for reading this and thanks for considering it.

just taking that one step further..
there are two types of optical toslink surround setups.
1- those that have built in hardware decoding (like my Logitech Z-5500's) which means the speakers recieve that undecoded 5.1 signal from the computer, and the speakers themselves decode it - splitting the signal to 6 channels.
2-non harware decoding speakers, that are 5.1 but have to recieve a decoded signal from an optical toslink connector. note these cannot be used with a mac, as the mac does not output a decoded signal.
an external speaker&amp package has to be used in order to decode the output from the G5 Power Mac/ G5 iMac

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