Restore from the backup of...or not?

Hi,
I have an unlocked iPhone with 1.0.2 and for some reason all of my music and videos disappeared off the phone. It has been working fine for weeks. The videos were fine and then the battery completely died. After a recharge (AC adapter) the videos and music were gone but when I looked in settings/general/about they were still taking up space.

I plugged into iTunes and it is asking me to "set up as new iPhone" or "Restore from the backup." Should I restore from the backup? It's from my phone a few days ago? I figure that will be OK but I don't want to get updated or something and end up bricked.

Thanks

I did the restore and it went OK. It still showed my iPod as empty but in iTunes it showed that the space was being used. I tried to sync but it told me there was not enough space. So, I logged in via SFTP and found the iTunes_Control folder here /private/var/root/Media.
There were two of them iTunes_Control and iTunes_Control_2. I deleted iTunes_Control and renamed ..._2 as iTunes_Control and now all my music and videos are there.

I still have one problem though. When I restored from the backup I lost a phone number that I had saved last night. Is there a way to find it? My recent calls were set back to the restore as well. I called the number last night. Is there a way to find it somewhere?

Thanks