As commenters above suggest i Tunes will only backup configuration files and whatnot.
All content is supposed to be available in the i Tunes library with which the i Pod syncs, so i Tunes will happily erase it, leaving to you the "burden" to restore stuff after the update.
Apple has a support document with step-by-step instructions for restoring back to i OS 10.
I have an i Pod touch (not mine) connected to my PC (authorized and linked to the same account of the i Pod's owner). Right clicking on the i Pod and selecting "Backup" runs too fast, I don't think it copied the whole 3Gb over.
The thing is configured for manual sync, current music and apps are on a different PC. Its been my experience (but its not scientific so i'm not posting as an answer) that doing maintenance ops on an i Pod on a machine other than the one it was originally synced from will blow it away and all content will be lost.
Here's the step-by-step instructions for an i Phone, which extend to the i Pad and i Pod touch.
Before installing i OS 11 beta, creating a backup of your device's contents and settings in i Tunes is highly recommended.