Currently Being ModeratedJul 26, 2011 2:09 AM (in response to RaniaRichardson)
If you synced regularly, your latest backup contains the data and settings you need to restore your phone after you set it up "as new device". But make sure to back up the iphone backup folder as well, in case you'll need the backup again. More info about the content and the location of the backup folder for XP can be found here:
If iTunes wants to restore your phone, there is no way around that.