From your post I'm guessing you're a little cash-strapped? How much data are we talking about in total? 3 gigs? 100? Unfortunately, backing stuff up costs money. The less money you have the less thorough you can be.
1) One way would be to burn DVDs. Or CDs if you don't have a DVD burner and can't afford one. In either of these cases, I would say archiving (.zip, .dmg etc.) would be a waste of time. Just burn files straight to disc.
2) Get a cheap firewire/USB hard drive off eBay. I don't know why you said this wasn't an option - price? You can probably find a working drive in the <40GB region for $40 or less. Get a USB 1.1 drive. Nobody wants them because they're slow as hell, thus cheap, but that's not a problem for only backups.
3) If you happen to have a MiniDV camcorder, you can use DV Backup to put around 15GB of data onto a MiniDV tape, with built-in error protection (cost of software $20, cost of tape around $3 each).
Most of your preferences are stored in various places within your Library folder in your home folder, mainly ~/Library/Preferences and ~/Library/Application Support, but you may have a gig or more of other stuff in that huge rats nest of folders. You could either sort through all that crap, choosing what you do and don't want to back up, or just burn it all to a DVD. Don't overestimate the value of every single application preference file. If your computer crashes it's easy to reinstall the OS and the software and set the preferences back to how they were. Back up the important, irreplaceable stuff first.
