How does system restore work?

So how does it work? I see that system restore checkpoints only take up a hundred megabytes or so each from what I can tell. Well how can it back up 150 GB worth of data with only 100 MB? I was messing around with system restore and found that I could go and uninstall 15 GB worth of programs and get them all back with system restore. Well in order for the computer to restore deleted data wouldn’t it need an exact copy of the file? If so then I am missing something because no compression will compress 15 GB. worth of data into a few hundred megabytes.

Also does system restore have any effect on secondary hard drives? As in can you use it to make changes to a non primary hard drive?
 
The system restore process simply restores Windows to the condition it was at an earlier date. If you install a new program and it goes bad for some reason a restore point will clear that installation from compressed archives made with each restore point. It doesn't compress 150gb of installed programs but restores all registry entries. The files and folders installed by softwares are still the same and untouched not compressed.
 
In simple terms System Restore restores the system files only. It pays no attention to any data your may have on your computer.
 
It mainly restores the system registry and desktop settings to a date prior to the installation of a specific program or simply the condition the system was in at an earlier date. That means any desktop shortcuts are suddenly gone as well as any registry entries made in the time inbetween the present and the restore date chosen. If system files become corrupted somehow a repair or replacement then has to be seen. Restoration doesn't help if the system becomes infected by a virus or malware either since those can also be changed by the "unwanted" there.
 
The system restore process simply restores Windows to the condition it was at an earlier date. If you install a new program and it goes bad for some reason a restore point will clear that installation from compressed archives made with each restore point. It doesn't compress 150gb of installed programs but restores all registry entries. The files and folders installed by softwares are still the same and untouched not compressed.

What is in these restore point compressed archives?
 
What is in these restore point compressed archives?

That's a good question. The answer is just about as close to but not quite accurate as the thought of compressed archives. The MS description on this is as follows.

How is System Restore different from Backup?
Answer: Unlike System Restore which monitors only a core set of specified system and application file types (e.g. .exe, .dll etc), the Backup Utility usually backs up all files including users personal data files, ensuring a safe copy stored either on the local disk or to another medium. System Restore does not monitor changes to or recover users' personal data files such as documents, drawings, e-mail, and so forth. While system data contained in System Restore's restore points are available to restore to for only a limited period of time (by default restore points older than 90 days are deleted), backups taken by the Backup Utility can be recovered anytime. http://www.microsoft.com/technet/community/newsgroups/faqsrwxp.mspx
 
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