Ipod touch troubles

Hello, i have bought a second hand ipod touch which after purchase found it is still registered and has passwords for itunes and so on,i've thought about hitting restore factory setting but am worried i will lose all music games and current apps that are already on it.my question is will i lose everything if i do restore factory settings and how can i re-register my ipod touch and also delete or atleast change the password,locks that are stopping me from fully using my ipod?i would appreciate any help,thanx