I go for the cd method, but with a slight twist.
I install the OS and then tweak it out as i desitre it, get all the drivers etc sorted out, install all my apps, and then heck all the stuff i require to be backed up regularly to be in the same place. I have my (and the family's) My Documents, desktops, OE email stores, Addressbooks, Favourites, IM histories etc all into one folder on another partition.
I then back up the OS('s...dual boot)+Apps with ghost....i then test the image after ive broken it up and burned it to my own bootable cds...and after that i can reinstall the OS+apps to a fresh state in about 10mins and just leave from where i was since all the data is still in the same place as it was when the image was made. Great for when you screw windows over
This also enables quick 4min backups at the drop of a hat by burning neccessary stuff out of that folder onto cd.