When you connect your iPhone or iPod touch to your computer, or right click iPhone or iPod Touch in iTunes and select "Back Up", certain files and settings on your iPhone or iPod touch are automatically backed up to your computer. You can restore this information if you need to (if you get a new iPhone, for example, and want to transfer your previous settings to it). The backed-up information includes text messages, notes, call history, contact favorites, sound settings, widget settings, and more. In addition, photos in Camera Roll on your iPhone or in Saved Photos on your iPod touch are also backed up.

iTunes Backup Manager give you the ability to browse, view, export and modify iTunes backup files. With built-in plist Editor, Hex Editor, Text Editor, database viewer, image viewer, SMS message viewer, notes viewer and address book viewer, you can view and edit any file that iTunes backed up from iPhone/iPod Touch to your computer. It can export SMS messages, notes and address book to text file or Excel file. It also give you the ability to edit backup files and restore them back to your iPhone/iPod Touch, So you can do many things that you can not do before, e,g change iPhone/iPod Touch's carrier name, modify game data and more.

If you want view and export SMS messages, Contacts, Notes for sharing with friends or just for archive, you need iTunes Backup Manager.
If you lost your iPhone, you need iTunes Backup Manager to view and export your SMS messages, Contacts, Notes and so on.

If you want maintains multiple backups of different time for one iPhone or iPod Touch, and select to restore which one back to iPhone or iPod Touch freely, you need iTunes Backup Manager.

If you want change iPhone's carrier name, time string, dock type to give your iPhone or iPod Touch a new look, or want modify game data, you need iTunes Backup Manager.