Backing up apps

[ibejack96]

I am thinking about flashing my first ROM (so I'm running stock Froyo), and would like to backup my apps so I don't lose any app data. I know Titanium Backup is always an option (both paid and free), but I would like to get a free option, and restoring every app one by one in the free Titanium Backup would be a pain. However I saw an option in the settings that sounded like Google would back up my app settings. If you navigate to Settings>Privacy, you see Back up my data. If you check that, then you have the option to select Automatic restore, which says that it will automatically restore backed up settings and data when an application is reinstalled. Does anybody know about this? Will it still work if I install a new ROM, or just if I uninstall and reinstall an app while still running stock?I don't mind reinstalling apps when I flash a ROM (I need to clean out my unused apps anyways), I just need to know if this works.
Thanks