iPhone/iPod Touch Application Restore
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Here's how to do it.....
DO NOT ALLOW YOUR iPhone or iPod Touch to do a Backup if your data is fracked up. The easiest way to avoid this is to set the iTunes to not automatically sync when you plug in a Device.

On a Mac it's under the 'iTunes' - 'Preferences...' Menu.
You can also check this screen to find out when the last backup was done. That way you know to which point you are restoring the Device.
Now, with the Device Connected, your are Going to Right-Click (Windows) or Control-Click (Mac) on the Device in iTunes. You will then choose "Restore from Backup" and the then select the Device.

Oh God, please don't judge me on my Playlists.
Click Restore, and in about 1 or 2 Minutes, all of your applications data should be restored.

Version Information
iTunes Version: 8
iPod Touch OS: 2.1
Mac OS/X: 10.5.5