Well I have factory reset my phone a couple of times now and here are the steps I take:
1. Verify all contacts have been saved to sim card.
2. Verify all photos, videos, music and downloaded items are sent to SD card.
3. I use Andriod Assistant App Backup and restore option to archive all the apps that I want to keep.
4. Remove SD card and proceed with the Factory reset.
5. Once completed I replace SD card and transfer all my data back to my phone.
6. I go to google play and download Android Assitant application.
7. I use the Android Assistand App backup and restore option to restore all archived applications.
Note: when restoring applications you will need to make sure that Unknown Sources under Device administration is checked. If it is note a message will appear and tell you to turn it on.
Hope this helps you with your question.
Just to add on to the great suggestions that Vonscurse gave you:
Ensure contacts are backed up to Gmail account or SD card. (SIM cards have a limited amount of contacts)
Pictures videos and music will be on the SD card.
Applications will be available through the Google play store. Backing up your applications can also be handled through 3rd party applications
Removing SD card is not necessary.
It is important that you understand what information will be lost:
Saved games etc
Hope this helps!
I thought that one of the installed apps (Lookout? T-Mobile app?) could back up SMS information and/or call logs. I believe their's an SMS backup and restore function, though I've never used it when doing a factory reset.
I've never done a successful backup and restore of apps, though I'm about to do another factory reset this week as my phone has shut down 3 times in the last 24 hours. Look for backup options in the apps' menus, I know that Llama, Touchdown, and others will back up their configuration and settings to a folder on /mnt/sdcard/ just be sure to copy those to mnt/sdcard/ext_sd/ before the factory wipe & reset!
Re: Android Assistant, can either of you tell us what apps it successfully restored?
If my power off issue recurs after another factory reset, I'm going to get litigious and demand a new phone from T-Mobile. Or a refund so I can buy a Galaxy Nexus.