Shadow copies is a feature introduced in Windows XP that kept incremental versions of your files in case you ever needed to restore files and folders from the past. As of Windows Vista, its role has been made a little effective. It is accessible on the “Previous versions” tab of file and folder properties as a list of versions in the past. If you use it on a folder, you can open a folder as if you were back in time and copy files out of it at your will. Just right click a folder or file, click “Properties,” and select “Previous versions.”
In the screenshot above, you can see versions from which I can restore files from. Say I want to see a copy of the folder from the past; I can select the folder and open it.
I tried it today to see if I could restore files that I had deleted, only to realize I disabled this feature on the volume I had the files on. Not much of a loss for me, but you can easily check (on Windows Vista) if you have a drive with shadow copies enabled by going to Control Panel -> System -> System protection. Check the drives you want to use this on.
Yes, this is very similar to Leopard’s Time Machine, but Time Machine seems to have exposed an API for programs to use it too. As a result, you can restore individual contacts within a program, although nothing is stopping you from restoring the contacts file on Windows. I also understand that Time Machine uses a different implementation (hard links?), but I do not use Mac, so I am not one to ask.