I just did it a couple of days ago, because of a problem adding a second gmail account, which it resolved.
The reset didn't touch the SD card at all. It was relatively painless, and I was able to restore all of my apps with AppBrain. Of course you do have to reenter all of your user ID's and Passwords, and Settings, and you will have to restore any Bluetooth pairing. I recommend that you backup up everything prior to doing it, just to be sure.
I was able to get all of apps installed within a couple of hours, and had all my home pages reorganized by the following day. I didn't notice any change in operation, except for the fix on the gmail thing.