I have been working (solo) on a few side web projects for the past several months. My name can be found attached (via WhoIs) to the domains I've purchased and this got me to thinking about worst case scenarios. Should I form an LLC which can own all assets I use in my ventures (and therefore absorb all potential liabilities)?
I'd go check with an accountant and a lawyer so that they can fully understand your context (e.g. you may want to set up more than one company depending on how you're organised).
I'd also double check your understanding of LLCs since they do not "absorb all potential liabilities" - just a goodly chunk. There are contexts where the directors are still liable. (For example banks will often only take out loans with personal guarantees. You're still liable if you knowingly trade in conditions where the company can't deliver, etc.)
My not-an-accountant-or-a-lawyer answer would be "yes". Having the option to shut things down cleanly and walk away is a very useful one.
Insurance is the standard answer to this issue. You can get all sorts of liability insurances to cover numerous kinds of risks.
Google is your friend here, so check out these kinds to get an idea what is available:
There are many options and generally you'd buy what's known as a Package from your insurer, maybe via a broker.