Game data is saved on the cartridges
the only data that could be lost is saved on the 3ds
SD card if u left the SD card in the 3DS there is a possibility they change it too

That's standard umbrella pulling, just in case. Don't sweat it. Worst that could happen, might be your Wifi data or Streetpass settings. And maybe your plaza Miis. Dunno if all that's stored on the SD card or not.

Hmm Photos/Videos are on SD Card (well CAN be)
Things like Pokemons got in that free application Pokedex 3D are stored on SD Card
Similar data type would go to SD Card too of course
Mii, StreetPass, WiFi stuff probably is on 3DS so if they would have to change something that is directly connected with this data it may be lost, but usually simple repairs shouldn't delete it
It's just safe way to play with client, to prepare for worst just in case, it's good way

well I just got an email from NOA  my 3ds is on it's way back.  I sent it out to them last Monday, and they got it by Wednesday.  So hopefully mine will be here in the next 2 days or so.  I'll find out then if my data is still there.

<optimist mode>
If they haven't mentioned anything in mail, then it's still here!
</optimist mode>

When I sent my 3DS I took out the SD, just in case. But they sent my 3DS back and all the data were still here.

This post has been edited by Crig_tumblr, Wed, April 11th, 2012 at 11:03

just got it back!  all my data is still there, but they took off my touch screen protector, and sent it back in a bag with a note. "we have removed your unlicensed accessory.  we can only repair licensed products and are returning it un-repaired"
Weird.