I found this online. Hope it helps! But I also found some articles that said it does not always work completely!
Android Backup/Restore service backs up and restores specific data with a Google Account on an Android phone running 2.1 (Eclair) or higher. The data is stored on a remote "cloud", and provides a restore point for application or device settings once the same Google Account is signed into on a phone.
If you replace your phone, you can restore the data you've previously backed up, the first time you sign in with same Google Account you used previously on a backup. If you uncheck this option, you stop backing up your data to your account, and any existing backups are deleted from Google servers.
Some third-party applications may also take advantage of this feature, so you can restore your data if you reinstall an application. If you installed and used the application previously on this phone or on another phone, your setting will be restored as long as you sign in with the same Google Account that you backed up your settings with. Backing up settings can be elective, and it is best to review the application description to check if it is supported.
Some of the settings that are backed up/restored:
System:
Wallpaper
Wi-Fi network identities and passwords
Spelling dictionary
Latin IME settings
NFC settings
Most of what is visible in the Settings User Interface, with the exception of settings that are not applicable to all phones (e.g. APN definitions) and settings that have security implications (e.g. USB debugging enabling or lock pattern).
Apps:
Some Gmail settings
Calendar settings
Browser settings (including bookmarks)
Play Store data
Some apps may use the backup service to maintain their own settings when you moves between phones. This is purely opt-in by developers, and generally not viewable what is backed up
Some of the settings that are NOT backed up/restored:
System:
Lock Pattern
USB Debugging Enable/Disable setting
CDMA or GSM Network configuration