Hello and welcome to my User Tip
This is a step by step instruction how to make and boot a bootable clone of your OS X system.
It can be used for backup, moving to a larger drive, moving your users to a new Mac (using Migration Assistant), defragmenting and optimizing the system, shifting data up on hard drives to make (more) room for BootCamp or another partition or as a data recovery/undelete boot drive.
Made before disaster strikes, it's a real lifesaver!
See these other User tips.
Gettting the right external drive
1: Get a external hard drive equal to or larger than the drive you intend to replace the internal one with. (if so) So later it will be bootable backup (clone) of that new drive.
If you like the idea of saving the differences between the clone updates, then get a much larger drive. If maintaining a pure clone, then the same size or slightly larger than your primary boot drive will do.
Get a self powered and not a Mac port powered drive! Why? Because Mac's can cut off external hardware drawing too much power.
2: Connect the new drive to the Mac and open Disk Utility in the Utilities folder. (say "no" to TimeMacine). Click on the external drive on the left and click Erase, move the slider for a 0x-3x secure erase, OS X Journaled/GUID as the format and a name like "Mac10.6Clone" and click apply. Go watch a movie.
If the scrubbing of the drive fails, try again and if it fails, the drive is bad and needs to be exchanged. All new drives have bad sectors, this scrubbing will remove most of them and make for a much more reliable backup. Highly recommended for all hard drives, SSD's no need.
3: Once the scrubbing is finished check under Partition that Opton: GUID and Format: OS X Extended Journaled or make it that. Quit Disk Utility.
4: Download and purchase Carbon Copy Cloner, it's the best cloning software and the only one that also clones the most vital RecoveryHD partition for restoring. Later you will use it to update your clone once your on the new internal drive. (Optionally is SuperDuper, but it doesn't do the RecoveryHD.)
5: Use CCC to clone your present internal drive to the external. Do not use the same name as the internal drive on the external, or change it before you boot from the clone using the Finder.
You don't need to mess with CCC preferences for the first clone as it has to to everything. Later when updating the clone it will save the changes between updates and take up much more drive space. If you want to maintain a pure clone, then set that in CCC preferences before doing a update, this is what I advise as it maintains space for later less you need to install additional software or move files for data recovery etc. while booted from the clone drive if the internal drive fails to boot up.
Repair permissions afterwards
6: Once the clone is finished, use Disk Utility to repair permissions on both drives. Reboot the Mac and hold the option/alt keys down on the built-in or wired keyboard for OS X's "Startup Manager" there you can select the clone to boot from. Check it out and be careful with your navigation as everything is duplicated, including the pathnames/shortcuts to your internal drive.
Internal drive switch
7: If you have a internal drive switch or install at this time, now is the time to do this. If you run into problems you can option/alt key boot off the clone drive, use the computer like before and get online. TimeMachine doesn't have boot to use ability.
More advice here:
Reverse cloning, etc
8: To reverse clone, follow the same procedure as above. First formatting the new or corrupted drive (if so) in Disk Utility and using CCC, while booted from the external clone, to reverse clone. CCC should ask to restore the RecoveryHD in this first clone process, so check that it will/does.
Bootable clones make ideal data recovery drives, just boot from it and grab the latest copy of files (or install Data Rescue for deleted files/corrupted drives) on the primary boot drive and secure erase and reverse clone perfection back on.
It's advised to maintain several time dated clones each on separate hardware, this way one can revert to a earlier OS X version or use older versions of software and to protect against accidents and other unseen acts. Provides maximum software and hardware protection.
9: If you cloned to a third party SSD, you need to enable TRIM support on it and after each OS X update/upgrade using third party software. Check MacTracker.com for the two versions and update it.
Remmeber 10.8+ users may have to right or option/alt click to "open" software downloaded from the Internet.
Update your clone
10: Update your clone occasionally and before a major internal boot drive change using CCC, it will take less time than a full clone each time like Disk Utility unfortunately does. CCC also has scheduling ability to perform the updates automatically.
Do not clone a TimeMachine drive.
Enjoy peace and software stability.