You should read the
Home Computer Backup technical brief; it explains how backups work and a little bit of the philosophy behind them. Briefly, though, the backup tool isn't designed to back up a small number of critical folders for archival purposes, it's designed to back up and restore an entire PC, for disaster recovery. The WHS backup feature uses a technology similar to Single Instance Storage to save only a single copy of a cluster of data across all backups and computers, which results in dramatic savings in storage space.