Yep, the backup is your user generated files (photos, etc.), apps and their related data, configuration files, etc. What I'm _assuming_ happens to OS related configuration files is they're checked for version, and revised as part of the restoration process.
I did need to reinstall my 3rd party apps, but any configuration was already in place. I'm sure with the correct configuration in iTunes (maybe app sync?) the apps would also be restored, but I generally use this as an opportunity to purge some things 🙂