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I don't really see why you would care about restoring settings so much, as they are easy to set back once you install a program.
Anyway, to make a compressed tarball of your home folder, including your personal settings, run this command:
tar -cvzf mybackup.tar.gz ~
Now mypabkup.tar.gz is a gzip compressed tarball, which is both takes up less space than copying home to a flash drive, and it will preserve your permissions, even if saved on a FS that does not support permissions.
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