most of my thoughts on this have already been posted by others here (i totally agree with eric's comment), and i'd feel a bit dirty for shamelessly copying my comment that i already posted at kottke.org over here (but head there if you're interested ;-).

just one more thing: i don't think time machine will impart a big performance hit. many of the more performance-intensive tasks time machine has to do are already done by spotlight. OTOH, i'm worried for this exact reason: spotlight only lets you search media that are currently mounted. it works well enough if you like to have all of your data on hard drives, but it doesn't help one bit for a large collection of backups scattered over many CDs or DVDs. what i'd really want from spotlight is searching all my files and being told which medium i have to insert to actually access the files i want.

similarly, i won't be impressed with time machine as long as it just gives up as soon as my external HD is filled up. i want the option of moving older stuff off to DVDs, or tapes, or other HDs, without removing them from the index.

iTunes and iPhoto suffer from the same problem. if there's any way to move a part of your iPhoto library off your computer wihout removing it from the iPhoto library, i haven't found it yet. with time machine, i'll have at least the option of just deleting older stuff from iPhoto after having it backed up -- essentially what i do now -- and later getting it back in there -- as i do now, but with metadata, ratings etc., restored. a step in the right direction, but a tiny step.