i dont understand what time machine is doing?

hey guys,

2 weeks back i bought my self an external to back up my **** with time machine, so if i wanted to restore stuff to leopard if my imac ****ed up the SL install, i could do it easily...

but i installed SL with no problems, spotlight was lagging a bit to begin with, but now its perfect, havent had any issues with it so far

my issue is though - i looked at what i told time machine to back up, my music folder which is like 80gb's, some web design stuff - 20gb's and my apps folder which is about 30gb's... but then i look at what time machine says is the total size of the back up and now im a bit confused :S how can it back it all up, if the back up its taking is like a 10th of the size of all the files?

please advise!

TIA