When you plug it in, you will be asked to setup as a new iPod, or to restore it from a backup. I always set it up as a new iPod, and then sync over my apps and media separately, because I have the impression that this is more likely to result in a "clean," faster iPod. I probably just have this in my head because of my experiences with Windows (and sometimes Mac OS X) PC's, where a clean install every 6 months is necessary.
Do whatever you want. If some apps you use have saved data that is not synced back to the cloud, you might want to restore from your backup. Most of the apps I rely on have built in syncing to the cloud, so I can just sign in, and the app downloads all of my settings or progress.