Windows 7 and certain editions of Windows Vista come with an automatic file and folder backup feature called “Previous Versions” that many PC users don’t seem to know about. Individual data file and folder backups are created by System Restore or by Windows Backup. With the default setting for System Restore, this means monitored files are backed up once a day. To be more precise, records called “shadow copies” are created. These keep track of any changes that have occurred for files and folders.
These shadow copies can’t be accessed directly. To see the previous versions of a file or folder, right-click the object and choose “Restore Previous Versions” from the context menu. A dialog listing the previous versions will then open. An example for a folder called “PDFs” is shown in the figure below. Only dates when the file or folder had changes will be shown. There are three buttons that allow for various operations with a selected previous version. Clicking the button "Open" will display a selected entry. Clicking "Copy" will allow you to create a copy of a particular version and save it in a different location. Clicking "Restore" will replace the present file or folder contents with those of the selected version.
And there you have it- a Windows time machine.
More information: Additional details about Previous Versions can be found at this link.
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