Well, from what I've heard and read...the RESET will wipe the phone clean, restoring it to factory out-of-the-box.
I know what you are speaking about though...how we can set a restore point on our computers, and simply restore the computer to a certain point in time, like "before June 2" or "before 2.3 download". But you can't set restore points on your smartphone. It isn't that smart!
Good idea though! I wish....
It's a funny thing...after my friend RESET his Droidx...his OS is the 2.3 Gingerbread still....whereas the phone came with 2.2 Froyo OS. That's strange. "Factory" would imply the OS that came WITH and installed on the phone.
Something I miss....with the 2.2 Froyo...when your phone rang...if you turned it over on its face, it would silence the phone. With the 2.3 Gingerbread OS, that feature is gone. Bah!