I'm no expert, but just spent a good chunk of time researching this.

Here's the options recommended elsewhere...

You can setup a bootable USB drive.  The OS commonly recommended was Ubuntu.  Then boot to that drive. Use exclusively for Bitcoin transactions and that's it.

Another option is to use Truecrypt and Dropbox for your backup.  (You're still at risk of keylogger attacks).  I wouldn't keep too much wealth in that vault.  For this option create a truecrypt vault.  Place your wallet in it.  It is recommended to use symlink to link to your wallet within the truecrypt vault.  I couldn't get that to work.  Instead I use MultiBit and specified where to save the wallet in the truecrypt vault.

So long as your computer is clean that should give you reasonable security for spending.

The other option is to use an mtgox online wallet with double authentication.  Meaning you have to get an extra piece of hardware for $25 that gives you unique onetime codes each time you access your wallet.  Frankly I feel better about using truecrypt/dropbox then a hosted wallet.

Then for savings....

After looking at everything I feel your best bet is still the paper wallet approach.  However you don't have to store the paper.  You can create screen captures of the private keys (or cut and pastes) and store them in a truecrypt vault.  And then store that vault in the cloud.  Be sure though when you create the paper wallet your computer is clean (this might be where having that bootable USB comes in very handy).

To import the private keys I tested MultiBit.  Using Mac Texedit.app I simply edited an exported private key file, then imported it back into MultiBit.  It seems to work and wasn't too much of a hassle for a long-term savings wallet.

 

This actually sounds decent.. And yes keyloging is mainly what I want to protect against, I already secured everything with passwords..

I use electrum, on ubuntu, that yes is installed on a usb stick.
It's my secondary wallet and is easy to backup and secure without any fuss on downloading a blockchain.
Sending and receiving of coins is pretty easy.

Since it's a pretty usual ubuntu install I can easily install and do anything I want for it that ubuntu can usually do.
I could of made it a live usb based version of ubuntu, but I wanted abit more flexibility, but it be pretty easy to do that if you wanted.

I used http://unetbootin.sourceforge.net/ to make the usb install drive, then install it to another.
Same program could be used to make a single usb drive a live drive and reserve X amount of room towards any programs and saved data you want between sessions.
Electrum is pretty easy to install for Ubuntu to be fair, then you just need to do standard stuff to secure it, giving it a nice long password and securing your seed (backup) somewhere safe
http://electrum-desktop.com/download.html

I'm not overly familiar with Mac. So can not offer any advice that is very specific to it.

At least with the electrum wallet that doesn't download the blockchain, you'd still need to be online to really check on or change anything.
But there is no reason why you would need to stay online longer than you needed to. So yes I suppose during bootup you could be offline.

I wouldn't generate an address via a 3rd party, I'd rather my program on my computer did it, that is just me.
I'm sure you could do that, some wallets will allow you to import those sort of details.

Pretty much every wallet software that I have installed to my computer has made one for me, upon install.
Now if you using one which doesn't, then I don't have any recommendations, since I wouldn't trust a 3rd party to generate my new address.

Think so.

I've never worried about that, since I keep all my machines both windows and linux regularly scanned.
You really don't have much to worry about on a fresh install of Ubuntu. How you expect it to get infected?

You'd only risk comes from keyloggers if you happily installed a wallet on an already infected drive, which quiet frankly is your fault for not making sure it's clean first.

Here's what you do. Download the Ubuntu LiveCD and put it on a USB drive using Unetbootin. Don't forget to allow for space to preserve files across reboots. Boot onto your USB drive and install Armory. Now, disable all network connections inside the operating system. Start up Armory in offline mode (it will prompt you since it won't detect Bitcoin running), and create a new wallet. Go to the wallet properties, and create a watching only copy. Save this to your USB drive (not the mounted file system). Make a paper backup if you want.

Now, boot back into your main operating system. Get Bitcoin running and up to date with the block chain. Start up Armory, and import the watching only wallet. With this, you can generate addresses, see incoming payments, and create spending transactions, but you cannot sign them. In order to sign them, you'll have to follow the Offline Transactions prompt, transfer the generated file to your USB drive, boot to USB, sign the transaction, boot back to your main OS, and broadcast the transaction.

No, it has to be the Armory client.


Armory requires a copy of the Satoshi client running in order to connect to the network and keep the block chain up to date. I thought your requirement was that you didn't want to have to download the block chain twice, once for your main operating system and once for the secure storage. With Armory, you still need to download it once.

Same. I love it so much. It's even running on my RPi

be aware that the Armory watching only wallet can generate you an infinite number of addresses to receive coins.  its a deterministic wallet.  thus the backup is easy also and only requires a seed and chain code.