Will deleting my iPhone backup delete everything on my phone?

Every time I sync my iPhone, I get the message "iTunes could not backup the iPhone because the backup was corrupt or not compatible with the iPhone." If I delete the backup, will it delete everything?

Nope. Delete the backup files from your computer/iTunes and then reconnect your phone, re-sync and then you get a fresh new backup file.

UNLESS…

… You're trying to restore the backup data to your iPhone. If you delete the Backup Data and your objective is to RESTORE (as opposed to merely just syncing with iTunes), then your settings (ringtones, mail data, Wi-Fi settings, etc.) will be erased. In terms of your music, video and apps, that depends on if you still have those files in your computer (or iTunes account for apps).