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If you have a Time Machine backup of your whole machine, you can just upgrade the physical harddisk to a newer, larger model, boot the install DVD and tell it when it asks that you have a Time Machine backup, and let it roll in.
Personally I haven't had a problem with it. My only regret is that I have a relatively small hard drive and for reasons that I don't fully understand OS X is much happier with a bunch of spare drive space = and I don't have any.
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