You must format the memory card, which will be done when the Vita is restored. Memory card data is PSN account-specific also. Definitely back up the Vita before restoring the system, but you won't be able to restore the backup if you change the PSN account that the Vita is using.
Do yourself a favour and go to IGN's Vita Wiki. If you have another memory card keep your original User ID data when asked to format your original memory card, say no, switch memory cards, the Vita will then want to reboot. Let it reboot, then restore Vita back to its original factory settings. Sorry I was vague just got in from work. If you only have one memory card then you must format it so that it can be used with another ID.