As psusi correctly points out, you shouldn't need to reinstall a Debian derivative. Just upgrade.
Regardless, the obvious answer to the backup question is to use version control to back up your home directory and config settings. For the config files in
/etc on a Unix-like system, Joey Hess's etckeeper is popular. I'd recommend using a distributed version control system like Mercurial or Git, which can be used to periodically push the repository contents off your hard drive, and thus acts as an automatic backup. With Mercurial you can set up a
post-commit hook which will push after you commit, so your backups always stay completely up to date.
Note that this is not a general backup solution in this case, but works well for important config files and so forth, since they are general small text files, and therefore ideal for source control. And in this situation distributed version control is super-efficient, comparable in performance to rsync but better because of the atomicity of version control. Mercurial, at least, will roll back rather than push a partial changeset, and I imagine Git does the same. Also, version controlling your config files has obvious additional benefits.