I have reported a bug that occurs in Karmic on launchpad, and I have been asked to re-test it on lucid or maverick. How can I do this best?
Install Ubuntu in a VM.
Pros: Your installation is persistent, and you can switch back and forth between the VM and your normal desktop with ease.
Cons: It'll be slow.
Use a LiveCD.
Pros: Most straightforward, same method as when you first installed Ubuntu.
Cons: No persistence of session, your environment is lost when you restart.
Install on a separate machine. CD read times are sloooow.
Pros: Persistence, speed.
Cons: Expensive if you don't have the hardware.
Personally, I'd go the VM route. You'll need to do with a LiveCD or physical install if your bug involves the hardware.
This depends on what bug you're trying to re-test. For almost all bugs, testing in a VM is great. As mentioned on another answer, Testdrive is good for that.
For hardware related bugs you'll need to run on the real hardware, which means that a LiveCD is a more appropriate method.
I depends on what kind of bug it was (estethic, a program crash, etc) but the simplest way would be to download Lucid's live cd, boot it and see if you can reproduce the bug.
If it's something that requires a real installation and it's not enough booting a live cd, then install Lucid on a virtual machine using VirtualBox, and you can test almost anything in there without affecting your current environment.