windos_no_thanks: I knew somewhere I'd just forgotten WHY.

I think its Ok so long as you mount it RO.

metavoid, that a good point. The FREESPACE is copied but by bit too.

You might want to look at the 'magic tar' too.
This has the advantage of only looking at used space and you can use the compress options too. It also gets round the live filesystem problem windos_.. brought up but it won't copy the MBR....
However you can copy the MBR explicitly after or even just remake it with lilo using a bootable Cd.

cpio is another option for this sort of thing!