Just a note since you are a new user. A factory data reset will wipe all of the data from your phone (apps, contacts, settings, etc.). Basically after the reset the phone will be the same as when it was first powered up.
My advice is to backup everything off of your sdcard and onboard storage (pics, videos, music, etc).
You will also want to make sure your contacts are backed up, with one of three ways. If you have your contacts synced through gmail, you should be good. If not you can set up an account and manually put them in, and after that they will be there from then on. The other 2 options are to use Verizon's backup assistant app, or export to the sd card. I prefer Google syncing my contacts, but backup assistant works too. I have never tried exporting contacts to the sd card, but I hear some people use it.
On the subject of backing up apps, there are two main options. First you can download AppBrain & setup an account with them. This acts like Google/gmail, with you syncing your apps to an account (use your Google account to sign in). You download the app, setup your account, then sync the apps currently on your phone. After you do the factory reset, you go to the market and download AppBrain, and perform a sync. It will then automatically start sycning the apps you had on your phone previously. The other option is to export your apps to the sd card, but again I have not tried this, so I don't know how to tell you how this works.
Hope that helps.
