We've looked at backing up and restoring your jailbroken iOS device with AptBackup, but it's not a perfect solution. If you're willing to spend a little money, PkgBackup is a fully automated backup and restore option to bring back all your jailbreak apps, hacks and extensions with just a few taps.
How does it work? Be sure to watch the video above for a full demonstration of how to use PkgBackup, but the process is pretty simple. Just download and install PkgBackup through Cydia (it'll cost you $US8, but if you update iOS and jailbreak a lot it's probably worth it) and launch it. Once you do, tap the gear in the upper left corner to choose whether you want to sync with your Address Book or with Dropbox, plus set a bunch of other options as well. Once you're all done, tap "OK" and PkgBackup will scan your iDevice for packages installed through Cydia. When it's done, choose the packages you want (everything is selected by default) and tap the "Backup" button. Sync your device with iTunes (if you selected the AddressBook option) and your backup is complete. When you want to restore after an iOS update, sync your device with iTunes again to get your AddressBook contact back (if necessary), re-jailbreak, re-download PkgBackup from Cydia, and tap the Restore button. While this method is still a little bit of work, it's a lot easier than re-installing everything manually.
PkgBackup is available on the Cydia Store for $US8.
Guru Guide: Back Up and Restore Jailbreak Apps for iOS 4.2 [The iPhone Guru]