iTunes creates backups of settings and certain other information on iPhone and iPod touch devices, which can be used to restore those settings to those devices after a software restore or transferring to a new device. The problem is, those backups take up space.
You can delete those backups quite easily in iTunes simply by visiting iTunes>Preferences from the menubar. Select Devices from the icons across the top of the dialog window.
In the list below the icons, click the name of your device and hit the Delete Backup button. That’s it, space saved.