Answer 1 is not the best way… it’s the old way.
The best solution going which I have found, and use regularly for moving site from local dev to live is at http://pluginbuddy.com/purchase/backupbuddy/. It backs up everything, including databases and plugins, and lets you restore a site or migrate an entire site to a new server. You don’t even install WP on the new server because backup buddy does it all. A full migration from local to live takes about 10 minutes.
For being able to save your widget setup to each specific theme you have under a WP install the plugin at http://wordpress.org/extend/plugins/widget-saver/ is most excellent.