I was wondering, when you update to 3.0 you know that you have to go to that Restore mode and then click on the software that you want. When you restore and finally get 3.0 booted up does this delete all the memory on your phone or is all the apps, music, call logs, etc. still on your phone?

A Restore deletes everything...

Have a nice day.

not exactly true, even a DFU restore does not clear everything, but lets not get into detail

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What do you mean? I want to get into detail so I can decide whether or not to update.

Doing a restore of your OS wipes the OS/application partition on the phone and removes any protected content data from the data partition (MP3, podcast, videos, etc.). The restore does NOT completely wipe the data partition, it only removes the protected content. If you jailbreak, this means that the DATA partition (as a step of the jailbreak process is redirecting the applications directory to the data partition) will still contain config files, logs, etc. from your jailbreak, even if you do a restore. That's why after you restore to a new OS and re-jailbreak, some of your jailbroken software settings have remained through the process.

This may be an oversimplification, but it should be a good enough understanding to answer any question you had.

Oh, there is way more to be found if the right tools are used: deleted emails, photos, files all the stuff. Think of the iPhone as a computer, deleting a file, even applying a new system does not wipe this data.
The iPhone has a solution for this, you can erase all content (takes about two hours - Settings>General>Reset). During the process the "free space" is overwritten with zeros. There is an app in the Apps Store iErase, does the same"really deleting2 all the stuff you already deleted.

just my 2 cent

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iPhone 3GS factory unlocked (3.1.2; Blackra1n, Cydia, OpenSSH, custom 3.0 ipcc file (no sig), tethering hack by Dev team, 32 GB)
iPhone 3G (3.0.1; Redsn0w 0.8, Cydia, OpenSSH) 16 GB