If you're kind of limited on storage space, I'd recommend the xz compressed tarball. I compressed my ~35gb filesystem to 13gb.
Have a look at this Gentoo wiki page: http://en.gentoo-wiki.com/wiki/Custom_Stage4
It says to exclude /dev from the tarball, but if you do that, remember to copy /dev/null, /dev/zero, and /dev/tty1 from a LiveCD or whatever. Otherwise udev is going to have some major problems. And use -a option on cp. You might just be better off including /dev.
And you can safely ignore a lot of the article, it's mostly for moving a filesystem to a different machine and not so much backup and restore.