Time Machine is a true one-click backup solution built into the latest incarnation of Apple’s Mac OS X (10.5), commonly known as Leopard. Literally all you need to do is turn it on and point it to the drive you want to use for backups - Time Machine then takes care of the rest (you don't even need to decide which files to back up).
When you first activate Time Machine, it will make a full backup of your whole hard drive - including your system files. Depending on the size of your drive this could take a while, so it is best left running overnight. From then on, Time Machine will regularly back up any the files that change - in the background and without any further interaction required.
Since all files are backed up, not only are your files safe, but so are those system and application preferences that you spent so long setting up. Even if your drive died completely, you could quickly and easily restore your Mac to exactly the state it was before the catastrophe.
The file recovery interface in Time Machine has to be seen to be believed!
You literally flip back through time to find the file you are missing. Or you can use the integrated Spotlight search to find the file for you.
Check out the Time Machine site for further information. If you still have questions, let me know in a comment.
written by Warren Denley