The circumstances for me were...
Received Pre 2 and activated on 11/19 running WebOS 2.0, got home connected to Wifi and OTA updated to 2.0.1. Ran for a week, reported performance, installed apps, some worked some didn't. After seeing one other report of issues with a Dr. and seeing some confusion over advice given I decided to Dr. my phone with the latest 2.0.1 Dr and make certain of the procedures and outcome.
Dr'ed Sat. morning 11/27 and reported result to WebOS Internals via Twitter and later in the day posted here in this forum.
I had a few pictures I had taken, one video I had taken, several of each I had copied from my computer. I also had some custom ringtones I had copied and about 1GB of music over to the USB partition.
It was completely wiped when the Dr. was complete.