It's quite impressive how many different sorts of backup we've put into Vista, and the launch of home server adds another one. You can:
Now there is some confusion about system protection. First if you turn on system protection (from the option on the left of the Computer/Properties or Control Panel/System dialogs) then a scheduled process will create a restore point at Midnight (or when the system is next awake) and every time it boots. Older restore points are moved off the system to make way for new ones. That's the version you can restore to: you can't restore to a version between restore points. Vista doesn't keep every version you save, but it does give you a daily backup.
Secondly Backups are listed on the previous versions tab whether the file has changed or not. However shadow copies only appear after the file has changed.
Most of us are used to "off computer" backups, but not a "revert" facility that we can carry with us. Shadow copies aren't supposed to keep versions forever – the system will push out old backups to make way for new ones - and that kind of thing is best done with a true backup. However the is a security implication because if you lost your laptop a confidential document which you recently deleted may still be recoverable via shadow copy ... all the more reason to use technologies like bit locker.
With Home server we have an additional client which backs up any machines you have at home to the server. Flexibility is great, but I do wonder if we're creating confusion with all these options.
Now here's a thing. I was looking for somewhere to send you for more information. IT's Showtime has a video called "New Backup and offline files features in Windows Vista" It contains this "hockey stick" graph showing how we expect the amount of data in homes, and the average size of disk in use. And from that we estimate the demand for home file servers. Which brings us back to Windows home server....
Postscript. One of the teachers at my school was famous for throwing erasers out of the window of his classroom. He used to say if you can rub-out your mistakes you're more likely to make them. So this morning I managed to shift-delete a folder instead of a file... and shadow copy brought it back. I wonder if the mere act of thinking about Shadow copy made me careless :-)
Not to forget that you have another backup solution with OneCare.
That is by the way one of the really, really annoying things about OneCare: It repleaces the wonderful backup, firewall, antispyware things that are in Vista already with in some cases less good stuff, for no apparent reason.
James O'Neill summarized the different ways to backup Vista: imageX, CompletePC Backup, Vista Restore Points, Vista Backup, and Folder Redirection.
I wonder why he calls the last option "folder redirection". I only know this feature...