Yeah, its probably a good idea to to a fresh install of Mac OS X every once in a while. It cleans out all the junk, and it doesn't take long at all to reinstall OS X from scratch, even with all the updates.
I would backup your entire Home Folder. You may not have enough space to back the entire home folder up. If thats the case then obviously you need to back up your Documents, Music, Movies, Photos, AND LIBRARY folders. The library folder has all of your preferences, safari (and any other browser) bookmarks, OS X Mail Mailboxes, Spelling Words thats you've added are in the Library folder, etc...
When you're putting everything back on your computer, DO NOT REPLACE THE NEWLY CREATED LIBRARY FOLDER!!!! This kinda defeats the purpose of wiping out your system and re-installing everything! Only replace what you need! So, replace the Safari, Mail, Spelling folders, and then take ONLY the preferences you think you need and replace them with the backed up one.
You can back up to CD, DVD, or if you have an external HD (an iPod will also work!) you can back it up to that as well. In my opinion, its best to get an external hard drive to use as back up. If you have an iPod with extra space on it, then you can use that as a FireWire Hard Drive along with its normal function, to play, and store music.
I usually make a check list of everything I need to back up and then put a checkmark next to it when I back it up, and then cross it out when I put it back on the new system. If you back up your library folder, inside YOUR home folder, then you'll have mostly everything you need.
The one thing that I ALWAYS forget to back up is my address book, which IS NOT stored in your library folder for some odd reason. To back that up, launch Address Book, and then under the "File" Menu go down to "backup database". It will then pop a sheet down and ask where you want to back it up to. If you're backing everything up to a CD or DVD, then I'd just back it up to the desktop so you know where it is.
I would repair permissions BEFORE you install the OS X updates. Its a good idea repair permissions after you install any app, but that does get a little tedious after a while, so I'd just repair permissions before any OS X update, and then again after you're all done putting your stuff back on, apps included. I repair permissions at least once a week and run MacJanitor everyday to keep my Mac running smoothly.
When you start re-installing Mac OS X, I usually skip over the checking hard drive part, but thats up to you!
Some of the little apps I like to have are, MacJanitor which runs the UNIX cron cleaning utilities. It cleans out log files and junk like that, that fill up your hard drive and slow your mac down. The daily one should fly right through, along with the monthly one, but the weekly takes a little longer, just so you know. Go to
www.versiontracker.com and do a search for MacJanitor (exactly as spelled!) and it should come up.
If you have a PC and want to view the screen of your PC in your Mac, download Remote Desktop Connection from Microsoft. Just go to
www.mactopia.com and I think its under the other apps section. Just make sure you have remote desktop enabled on your PC, or else you'll spend hours trying to get it to work!
BTW...NEVER, NEVER, NEVER, DO AN ARCHIVE AND INSTALL!!!! ALWAYS, ALWAYS, ALWAYS, DO AN ERASE AND INSTALL!!!!!! Doing an archive and install just screws everything up and about 95% of the time end up doing an erase and install in the first place!