You are doing it wrong then.

I installed the update and lost all the apps id purchased inc facebook which was on when i bought the phone

I updated itunes last night and it works a treat now and it was easy to do ,just clicked on update and after a few mins it was done no problems bought some songs and had no trouble syncing ipod which people were having trouble with when the new version came out ie losing all the music or ipod would'nt sync so thats why i never updated before but everything is fine now,what i did do though before updating was to back up all my music ,just in case.

No I'm not. The 'update' actually downloads the new version, uninstalls the old version then installs the new version. It doesn't actually apply an 'update' to the installed software.

I had trouble with Safari that came with itunes. The computer went mad.