Originally Posted by
stevesnj
Does TM run from an image file?
No, it recreates your file system in subfolders on the TM drive, which are browsable.
Can I restore my entire system from a TM backup?
Yes, back to any date the TM drive still retains. This assumes you backed up your entire drive. If your TM is set to only back up your user space, you'd first have to reinstall OSX, recreate your user ... then restore from TM.
Can I have other files on my external hard drive or is a dedicated drive needed for TM?
You could store other files on the TM drive, avoiding TM's regular folders. However, any files you add will not be backed up themselves (TM will not back up TM's own drive), and they will subtract from TM's available space.
Ideally, you want to give TM a bigger drive than your working drive. That way you can back up the entire drive, instead of just your user folder and a few other locations you might use, such as MySQL's folder.