Recommended way to back up a Macbook before upgrading its OS?
Hard to answer, not because of technical difficulty - but psychology. ;) So I will take the answer a bit easy...

A. The simple way

Make a Time Machine backup (if you do 1st times will get a full backup) so you will be able to restore anything that you created on the Mac. For this, you will need:


one external HDD (big enough), connect it
go to System Preferences
use this external HDD as Backup disk for the Time Machine


B. As A. but with a bootable Time Machine HDD

For this, you will need:


one external HDD (big enough)
your OS X install DVD
turn off Time Machine, if you have it on
connect HDD
insert install DVD
start /Applications/Utilities/DiskUtility.app
select your external HDD
go to "Restore" Tab
into "Source field", drag your Install DVD
into "Destination", drag your external HDD
triple check (so DON'T ERASE YOUR INTERNAL HDD!)
press Restore and go to have a lunch
after the restore, exit Disk Utility
eject Install DVD
go to System Preferences and enable Time machine
select your external HDD as BackupDrive
Make a full Time Machine backup


With the above, you get a BOOTABLE Time Machine HDD. When things go wrong, you can hold down Alt when your Mac is booting and select this HDD for BOOT and restore from it without needing the install DVD (faster restore).

C. Want even more?

Make working copies of your HDD. Like above, you will got a BOOTABLE external HDD, but not for install purpose, but for working from it. So, you can boot it and continue work as from your internal HDD.

For this you can:


get a donationware: CarbonCopyCloner, or
make a normal install into external HDD, boot it, and use the MigrationAssistant.app to migrate data from the internal HDD to freshly installed external HDD


Do you know that paranoia is the right state of the system administrator's mind?

Do B and C - So you will need two external HDD's. It is the best, because you can drop your backup HDD from the table, and after this crash-test, the drive will be probably unusable (broken). :) Anyway, for this solution, you need to not crash-test both drives.

With this, you will be able to WORK immediately (from the external drive) and restore from the Time Machine (from the second external HDD).

Know Murphy?


Anything that can go wrong, will go wrong. (Hang up Murphy!)
Your upgrade will fail (but usually it doesn't)
Your backup will fail too (but usually you don't need it)
so... take it easy ;)


Ps:

Here are more ways, e.g.: over the network from the command line with rsync command, etc. etc...

YOU REALLY WANT TO READ


This, especially
http://support.apple.com/kb/HT1553
http://support.apple.com/kb/HT1427
http://support.apple.com/kb/HT1177