Vista now sees a new backup feature separate from the system restore where you designate where the archives are saved to. The help and information window that will open describes how the system restore feature works.
What types of files does System Restore change?
System Restore can make changes to Windows system files,
registry settings, and programs installed on your computer. It also can make changes to scripts, batch files, and other types of
executable files on your computer. Personal files, such as documents, e‑mail, photos, and music files, are not changed.
For example, if you download a personal file, such as a photo from a digital camera, on a Friday and then restore your computer to the state it was in two days earlier on Wednesday, the photo will still be on your computer.
However, if you install a photo viewing program on a Friday and then restore your computer to the state it was in two days earlier on Wednesday, System Restore will uninstall the program, and you won't be able to use that program to view photos.
For seeing the restore feature disabled on a Vista machine review the instructions seen at
http://www.howtogeek.com/howto/windows-vista/disable-system-restore-in-windows-vista/
A far more detailed explaination on the backup and restore feature now seen in Vista can be looked over at
http://www.biztechmagazine.com/article.asp?item_id=237 You can enable or disable an automatic backup of the entire system in the Business, Ultimate, and Enterprise edtions. The Home Premium has a limited version of that feature.