iTunes not updating Apps.

Hi - Having a SERIOUS problem w/ the new iOS4 update: iTunes shows the manual sync button for my Touch, but it is grayed out. In other words, iTunes WILL NOT ALLOW ME TO SYNC. UGH. The update removed ALL apps off of the Touch(except the original Apple ones, natch - with the exception of App Store app, iTunes store, etc), and seems as there is no way around this without a restore. This would effectively remove all else off of my device, yes? I don't trust back-ups, as they aren't working, either. WHAT GIVES?? Is my Touch a goner until the NEXT 'BUG FIX' (LOL)? THNX!!