How much data is on your iMac now? Will it all fit on the spare space on you iPod? I'm assuming you don't have an external drive of any sort other than the iPod.
Are you willing to spend any money on backup software, or are you hoping to just go to the iPod or DVD or whatever? If you want to spend a little money, there are a number of inexpensive but good backup solutions out there. In fact, there was recently a "I order you to take a backup" thread that could provide some insight into solutions for you.
I wouldn't worry so much about completely duplicating you settings/etc., as those can be fairly easily restored, but it may be beneficial to grab your preferences files.
Also, make sure you deauthorize your iMac (for purchased music) before selling it so that it doesn't count as one of your 5 uses.
Edit: Another thread on backups
here.