Will upgrading to iOS 4.1 delete my contacts and calender settings?

I tried to upgrade my iPod Touch 2g to 4.1 but iTunes gave me a warning message saying that upgrading will "restore" my app settings. Does this mean things like my calender appointments, contacts and bookmarks will permanently disappear from my device?
This might be an extremely stupid question but this is the first time im upgrading and id be very grateful for help

You will always get this warning, but restore anyway. You will be offered the option to restore from backup on down the line. There are always risks in a process such as this. If we didn't backup, we'd never update, restore, reset, etc.

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