Are my bitcoins safe? As I understand, the safest way to keep your bitcoins is to have them in cold storage. 

After reading a few articles I just wanted to make sure the technique I will use will allow me to pull my bitcoins out of storage whenever I want:

1) Boot up a computer using a linux live cd that is not connected to the internet
2) Transfer a copy of armory over using a USB stick
3) Generate a new wallet and 1 address. Encrypt it, and keep a paper backup of it.

I can now send all bitcoin 'savings' to the 1 address that the wallet has, and even if the computer that made the wallet is destroyed I can still recover the wallet from anywhere (even if I didn't copy the wallet file anywhere) because I have a paper backup?

As I understand it this should work?
That seems right except there are some gotchas if you try to spend from your paper wallet.  The "change" will go to you another address and the paper backup address will be empty.  This should not be an issue with Armory though because it has deterministic addresses.  Be sure to follow the instructions carefully.