Mac OS X 10.5 "Leopard" introduces a new feature for automatically backing up data on your computer. For more information please visit Apple Support - http://support.apple.com/kb/HT1427.
Once Time Machine is activated, all free space the Time Machine drive will be used given enough time. This is the case since Time Machine keeps as many versions of a file as there is space for. If a computer has Time Machine enabled on a 500 GB drive and backs up data stored on an 80 GB drive, yes the backup drive can be used to store other files, but this will become difficult as the backup drive keeps multiple copies and takes up even more space than the original drive. It is advised to use a drive that you can devote to backing up and will remain connected to the machine for long periods of time. In this case, Time Machine provides the convenience of being able to quickly repair mistakes and problems. However, Mission Critical data should not be backed up by Time Machine alone, and it is the client's responsibility to ensure this data is backed up via another method.
Please read the entire document before attempting to restore files via Time Machine and make time to practice these steps before you have vital information lost.