What does it mean when my ipad is in Recovery mode? It's connected to my imac for software update and it says I must "restore" the ipad before itunes can be used. Will I lose everything on my ipad?

What does it mean when my ipad is in Recovery mode? It's connected to my imac for software update and it says I must "restore" the ipad before itunes can be used. Will I lose everything on my ipad?

Unless you have a backup from which you can restore, yes you will lose all of your data and settings.
You should be able to sync your content back to the iPad if you have been syncing with iTunes all along. If you don't sync with iTunes, you can download much of your paid content again for free as long as you use the same Apple ID. This explains downloading past purchases.
http://support.apple.com/kb/ht2519
Unfortunately, at this point, you must restore the device before you can move on. There is nothing you can do to avoid it now.

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