If you click the Back Up button in iTunes, you'll most likely see the following dialog:
What does this mean? And, like all dialog boxes iTunes shows me, should I click the no button like I'm inclined to? :)
Short answer: Yes, you should back up your apps in iTunes.
Long answer: Backing up apps in iTunes means that iTunes is going to copy the application themselves (not your data1, but the files that make the app run) to your iTunes library. This used to be critical before you could download past purchases from iCloud on your device, but it is still quite useful. If you later need to wipe and restore your iPhone from a backup, iTunes will install your apps back onto your restored phone, but only those apps backed up in iTunes. For the apps not backed-up in iTunes, you'll have to remember what apps you had and download them from the app store (and/or iCloud) again.
If you choose not to back up your apps in iTunes, the restore process will still put your data back on the iPhone for those apps, it just won't install the app for you. Once you download the app and open it, your data will be there waiting for you.
If the idea of remembering what apps you had installed and manually installing each of them after a restore sounds tiring, then yes, you should choose to back up your apps in iTunes. But, if you're always running out of disk space, you may want to trade the possibility for future hassle for precious megabytes now2.