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It totally depends upon your method of update.
Since you will be upgrading from gingerbread to ICS I strongly recommend you to do a full wipe when you upgrade.
Full wipe guide.
To backup apps using titanium backup you need to have a rooted phone.
I also recommend having your contacts and text messages backed up using the many free apps available on the Play market.
Thanks - my phone isn't rooted.
By "this" do you mean wipe? If you are on the stock os and recovery I don't think it would be possible for you to do the wipe properly.Is this done after or before the (via Kies) upgrade ?
A wipe does not rid the preinstalled apps only user apps.Does this wipe get rid of all the preinstalled apps as well ? Will I have to reinstall them all afterwards ?
If you are only worried about the paid apps, do not worry, you can re download them from the Play store without having to purchase again. Once you pay for an app the info is stored on the google server so that you need not pay againIf I can't use Titanium backup, will I be able to redownload paid-for apps without having to pay again ?