[Samsung Galaxy SL i9003] spacebar2011:
First off, you only need to back up apps that YOU have downloaded. System apps and settings need not be, and in most cases, should not be backed up or restored as they might cause conflicts with a newer/different f/w. Backing up apps means that only the installation files will be copied and you have to reinstall them one by one while restoring, its just to save you from running around and downloading all those apps all over again. Avoid backing up and restoring any settings when upgrading f/w. Settings should only be restored if you're flashing the same f/w again or if you've only doing a factory reset (full wipe).

You do not need to take screenshots of system settings unless you've done specific or unusual customization of a particular app which you can't or won't remember when restoring.

The backup will all be on the SD card. After backing up, copy the contents of your SD (a mirror) to a safe location on your PC just in case.

Titanium Backup can do your contacts and texts but not pictures. Anyway, you need not worry as you can always restore your contacts from your Google account when you sign in after the upgrade. And if you're like me, you won't worry about the pictures as almost all will be restored once you sync your Facebook friends with your contacts.. ;)

There's a brilliant app called "Life Saver2" on the Market which can backup your call logs and texts (not contacts) with a single click. Just install the app again after you upgrade and click to restore it all from the SD.

GO Launcher EX has a 'backup configuration to SD' option which can restore your config from SD after the upgrade. It will restore your launcher settings and shortcuts as you backed up. It won't restore widgets as that's an Android limitation. You'll have to place the widgets manually again.

GO Sms has a similar feature too.

Flash (remember to factory reset using hardware button combo and not from the "Factory Reset" in the settings menu, before and after flashing) and setup your Google account first. DO NOT restore any system apps or settings from the previous f/w. All system apps will be updated automatically when you setup your Google account and launch Market and/or set up auto sync. You can, however, restore Maps, Talk and Voice Search.

Restore your apps and set them up as you like. Restore call logs and SMS from Life Saver2. Restore contacts from your Google account (restoring contacts from TB has one drawback, it doubles up every contact as you already have it all on your Google account).

You do not need to reboot after you've done the hardware factory reset after the flashing.

And yes, its stupidly easy to forget to have your device fully charged before starting the flashing process. Trust me, you don't wanna experience it!

Happy flashing!! :)

Answer to your final question - KIES will not recognise XXKB3 as a upgradeable f/w if you're trying it in India as its an European f/w. There is a Windows registry hack for fooling KIES but it'd be simpler to do it one of the following ways. When the GB update is out, you can either flash the Indian DDKB2 and then connect to KIES to allow the upgrade OR you can get the GB f/w (it'll be readily available don't worry) and flash it using ODIN. You can restore apps after the GB upgrade following the same guidelines pointed out above.