Just don't rely on the auto-backup. If you backup and sync as soon as you plug in the phone, manually click the backup button again for good measure. Also, you need to enable backup encryption if you want it to also restore all of your passwords. Otherwise, you need to re-enter most of them (e-mail, web sites, etc...)
Basically, a regular upgrade doesn't wipe anything. A Restore seems to do a wipe, then you're stuck with whatever *legit stuff is in your backup. If you have old texts you are nervous about losing, take a screen shot of the important bits. I'm 99% sure they get restored, but I'm 100% sure your photos will be restored.
EDIT: You also have to disable find my iPhone before it will allow the restore. Done that way to make things difficult for iPhone thieves...
Just broke my personal record for number of consecutive days without dying!
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