That new Backup Feature in STEAM is actually very nicely put together. It creates an EXE file, or even many EXE files depending on the size of your medium. And allows you to move that content to a system without a copy of that game, and then to give that content to the system cleanly and easily.
I haven't gone through the whole proses myself, but from just messing around on my own system it appears to be exactly what the fans where asking for. Personally I have my Phat Pipe so I don't think I will use it, but a good effort.
An improvement would be allowing the user to specify the exact size of the partitions instead of choosing between CD size or DVD, but then maybe that would be pushing the guys at valve too far.