You should always maintain a backup of your primary drive.
I plan to first do a fresh install of Snow Leopard
WIth Snow Leopard, you can simply boot from the Install DVD and reinstall over the current system and all your user data will be maintained. You don't need to erase/format first.
FYI: You can backup iTunes by copying the entire /Music/iTunes/ folder.
Most likely it would fix it. And you would not lose any data/have to set everything up again.
If it doesn't fix the problems, you can always erase then install.
Have you tried first booting from your Install DVD, running Disk Utilities, then Repair the disk and Repair permsisions?
Whatever you do, you should prerform a backup before proceeding.
Are you running Time Machine?