In preparation for the worst, before I updated to 4.2.1, I backed up all my apps with Carbon (free version) and all my texts with SMS Backup+. Carbon wasn't doing the text thing yet. Maybe paranoid, but I then copied my entire "SD card" (partition) to my box account. Of course, the OTA update failed miserably (3x) and I ended up doing it manually anyway. I was shocked that my google acct actually remembered which apps I had installed & reinstalled them manually, never had that work before. Carbon then restored most of the app data without a problem. I still had to manually add my email accts back to the Accounts section though. SMS Backup+ works flawlessly except that it doesn't back up MMS. Not sure if Carbon does or not, I haven't played with it since it updated.
All in all, once the update finally went through, the restore process was relatively painless.