So here's the deal.
I just bought a WD 320gb external drive since the 120gb in my MBP wasn't going to cut it. I created two partitions on the external drive, one 120gb one set aside for Time Machine and the rest I set aside for all my extra space.
First off, Time Machine needs quite a bit more space than the space used by the data you want it to back up. If you want to back up a 120 drive then the TM dive needs to be about 180GB. Because TM keeps hourly, daily and weekly past versions. So add up all of the space you are not excluding and multiply by 1.5 or 2 and that is how big the TM drive should be. It can be smaller but then you defeat the point of TM.
Why would you want to store other data in the TM drive. It will not be backed up. Backing up data to the same drive is notmuch of a backup is it.
You really have to work out a backup plan. If you care about the data (meaning you need it to last for 20 years) then you need a plan that at the least follow these two rules (1) Data is always stored on at least three different media and (2) data is always stored in at least two geographical locations.
For many people the data on the internal drive is "copy #1". The data on the TM drive is "copy #2" and then yo have a hard drive you keep off-site (say at the office) that holds a third copy and you rotate the drive with one at home. This means three external drives used for backup.
I know, the above is a hassle so few people bother So I'll bet that in 50 years there will be very, very few 50 year old photos. Almost all will have need lost to poor backup plans within 20 years of being shot. To bad because I kind of like the 100 year old photos my grandmother still has
So would you suggest not using Time Machine then? Other than a sort of cool graphical display, I'm not finding any real incentive to use it when I can just make back-ups manually...
Time Machine make INCREMENTAL backups. Most home computer users when they make backups simply clone the data over top of the last backup because incrementals are hard to understand. The value of TM and the reason to use it is because it make incremental backups and recovery from same accessable to more people. Any incremental backup system is much safer. One example: Lets say you have a good backup. Now un-known to you iPhoto screws up and corrupts 1,000 of your images. Youo don't check every image every day so you don't know this. Then you make a backup. What happend? Your only copy of those 1,000 files just got over wrten with 1,000 corrupted files and you will not know this, maybe for weeks. When you discover the problem it will be to late. Whould have been nice if you had only writen the changes to the backup disk then you 'd have a change history of every file. If you give Tm a large enough disk you can keep months and months of history.
The value of TM is that it does ties it's best not to over write your old data with a new backup. It saves the old backup for as long as it can, given the amount of space yo provide it with. I just bought a 1TB drive for $170. That's cheap. Not reason to buy a smaller drive. Just give TM a terrabyte what do you save buy going smaller $50?
Disk failure is not the #1 cause of lost data. Operator and software error is. After that natural disasters the threft of the equipment. So we use incremental backups and off-site copies of data.