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Also, if my host is completely down (as mine was this weekend), there really is no way to point to a new site if the host is also the registrar.
Looks like I should separate the 2 items with different companies.
But back to my question....how do I set up a mirror without that penalty?
a mirror site that does not get the search engine duplicate content penalty
If your site is www.example.com, configure your mirror as www2.example.com, and add a robots.txt which blocks all the SE bots.
If your primary site goes down, you simply adjust your DNS so that www points to the mirror, and remove your robots.txt file, and you're all set.