I'd bet my lunch...
...that Apple uses the techniques described here:
http://www.mikerubel.org/computers/rsync_snapshots/
I've used a variation of this on Linux for years, but it should be OK on Windows (there is a section in the FAQ about some cygwin rsync issues, but there are workarounds). This has saved my bacon several times, as I have suffered from more than my fair share of hard-drive failures (actually the reason I read this misleadingly titled article).
How it works is fully described if you follow the link, but in summary, each backup stores a complete snapshot of the filesystem, but unchanged files are simply linked. If you're canny, you can have daily backups, with hourly snapshots since the last daily, and 5-minute backups since the last hourly. You therefore need never lose more than 5 minute's work.
For typical usage patterns, where most of a disk is unchanged, a backup drive about twice the size of the live drive can store backups going back several years, even if snapshots are taken every 5 minutes. All snapshots can be accessed just like a live filesystem. Comparing two versions of a file is simplicity itself, and file recovery is just a simple file copy.
Of course, there's no slick GUI, but once it's up and running, there's no need for any UI at all - it just works, and because the backups are live filesystems, you can access files in the snapshots using whatever software you want.
Biting the hand that feeds IT
