You can reinstall OS X without wiping the disk, so if the O goes wrong, you can do a repair install and carry on. This doesn't wipe out your data.
However, you can also do a total nuke and pave that wipes *everything* and start again from a blank disk - in this situation you would need your Time Machine backup to recover your files.
If your hard drive fails then you will definitely need your Time Machine backup. If your drive fails (and they sometimes do - it's just the nature of storage devices) and Apple replaces it, then when you get it back home you plug in your time machine disk and select "restore from backup" and all your files will come back just as you left them.
Buy a USB external hard drive and plug it in every so often (if it's always connected, Time Machine will keep regular backups, but if you only connect it once per week then that's when it will do the backup). The first time you run it, it will take a while to do, but after that it just looks at the changes since the last time you backed up, so it doesn't take ages every time).
Apple has some great videos for new Mac owners about some of the features that make using OS X really handy and Time Machine is definitely one of them. All you need is a normal USB external hard drive or if you want to be totally wireless, an Apple Time Capsule (although that is quite expensive and probably unnecessary).
You may want to
start here, on Apple's site. Some of this might be obvious to you, and some of it might be new to you, but there's a lot of handy tips in here. Apple's how-to on
Time Machine is here, and goes through the basics of using it and how it all works.
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Speaking of time machine backups, i used to have parallel installed with windows 7 and i had to 'blacklist' in the backups because it will do the whole thing overtime backup started.
Did they fix that or is there a work around ?
There's no work around - Time Machine works by looking at which files have changed between backups, and Parallels installs Windows into a disk image. when that disk image changes at all (like changing one file in Windows), then according to Time Machine, it has changed and must be backed up.
All that Time Machine can "see" is the disk image as one giant entity. It only does granular changes on the Mac partitions.