Which folders do I specifically copy to my second hard drive to do this?

Generally (but this can be done otherwise if somebody wants to) application settings are stored in a file/files, which reside under your home directory (personal settings) or in some higher directory like /etc (system-wide settings). To copy your personal files and settings you'd just copy your home directory (called usually /home/yourusername/ or shortly ~ or as an environment variable $HOME). To copy system-wide settings you will need to know for every application where it saves it's own settings (usually, like I said, in /etc). Applications you don't need to backup, since they can be (in most cases) reinstalled from the web, or if you have compiled them yourself, the code should be somewhere. If you've created your own apps, you do know where you saved the code

If you just wish to do a rough backup and have a lot of space and are ok with the fact that not everything might be backup'd (well if you want everything, just use dd to create a one-to-one copy), you copy

- your home directory (/home/yourusername)
- the files in /etc/ directory (config files there are usually text files)
- if you wish to save your bootloader settings, it's /boot/grub/menu.lst for GRUB or /etc/lilo.conf for LILO (usually).

Just keep in mind that some programs might, for some reason, save their settings some place else.

Try this:
Howto: Backup and restore your system!

Thanks, so er, in noob speak that means that if I want to retain everything I want:

1. applications
2. application settings - ie: the filter configuration on my email app - Kontact
3. Email files
4. Other files that I keep on my desktop

I should copy the home directory and the etc directory.

Cool

Actually, I think most applications live in /usr, not /etc.

Maybe I'm wrong about that, though.