I dont want to loose my apps

I will be updating my iphone today and I will also be formatting my macbook hdd.

Now Ive dragged all my apps from my itunes library into a folder and backed that up on my external hdd.

But that doesnt seem the correct way to do it as I have alot of paid apps and that would mean I could put these apps on other iphones.

Why are you formatting your MB?
Can you backup your MB onto an external HDD using TM? If so then you can just restore your MB using that. As for your apps they will only work for syncing your iphone into an iTunes that you have logged into you account with (that's how they prevent piracy). The downloaded apps will be connected to your itunes account so cannot just be used by anyone.

Hope this helps

- Simon

Great, cheers. Im also backing up my itunes playlists. Ive used a guide where I export the playlist as an xml file. But they are only 12kb in size. If i try to add this to a new library will all the songs appear.

They should do yes, the playlist is essentially just a list of all your songs and albums though, not your actual music. If you have not backed up your actual music you will have to do that aswell. The actual music is in the folder Home > Music > iTune > iTune Music.

HTH
- Simon

Many thanks....

Anytime

- Simon