Reference:
http://dev.mysql.com/doc/refman/5.0/en/server-system-variables.html
Assumptions:

Server1 IP: 10.1.1.1
Server2 IP: 10.1.1.2
We will completely replicate all databases
Servers are not in production yet. If they are – be careful when rsyncing data

Notes:

This setup can be used in HA environments, provided that only one of the servers is used for writes (INSERTs, UPDATEs, DELETEs) at a given moment
In case one of the servers crashes, [...]