<p>How do you back up your development machine so that in the event of a catastrophic hardware malfunction, you are up and running in the least amount of time possible?</p>

All important files are in version control (Subversion)
My subversion layout generally matches the file layout on my web server so I can just do a checkout and all of my library files and things are in the correct places.
Twice-daily backups to an external hard drive
Nightly rsync backups to a remote server.
This means that I send stuff on my home server over to my webhost and all files & databases on my webhost back home so I'm not screwed if I lose either my house or my webhost.