I just downgraded my iPhone 3G from 4.0.2 to 4.0.1 and now I'm loading the backup from my previous sync. Will it automatically take me right back to 4.0.2 loading the backup? or just my contacts/apps as I want?
No, iTunes specificly say that your backup is just your contacts, caladnder, settings etc.
It's never recommended to restore from backup as it can cause slow performance, bad battery life, crashes and many other problems. Because of this is it recommended to rather sync your contacts with someone like google.