Yesterday, I spent 3.5 glorious hours upgrading my iPod Touch to 4.0. The upgrade was uneventful (although long) until I was told I could disconnect the iPod from the computer. I did so and checked on my music and audiobooks. . . . I found that there was nothing on the iPod. . . . 0 Songs, 0 Books. All apps though were there. I reconnected the iPod to the computer and sure enough, the computer showed that I had 15 GB of music and books on the device (slightly comforting). As I fretted about what to do, I tried yet one more Sync (the 3.5 hours spent upgrading contained more backups and syncs than I could count). Lo and behold, my music and books reappeared! This last sync was not part of the instructions and I found nothing online from people with the same problem as me.
The first good thing I see after my now successful upgrade: I get wireless reception in rooms where I previously was unable to pick up wireless reception!
The moral of the story: Make sure you backup before upgrading!