The Windows Vista Team Blog have an article on the new Shadow Copy feature in Windows Vista

Windows Vista offers a new Shadow Copy feature which saves previous versions of your files without you having to overtly create a backup of them. I've used the Shadow Copy feature in Windows Vista many times. There have been times when Word 2007 has crashed (gasp!) on me in the middle of writing a document, and with Shadow Copy, I was able to quickly restore the file and recover my data. What's even better is that if you're like me and compulsively write and rewrite (and rewrite) your files over time, you can revert back to any previously saved state of that particular file -- for instance, if you've inadvertently overwritten it at some point. Not that I've ever done that

Using Shadow Copy to Restore Previous Versions of a File