Previous Versions in Windows Vista and 7
Previous Versions is often a godsend for those who have not performed any regular backups in Windows Vista or 7. Sadly, Windows XP has no such feature.
Previous Versions is a part of System Protection/System Restore in Windows and you can configure it as specified in the Configure System Restore in Windows article. This also means that files and folders recoverable by Previous Versions are usually updated daily with Restore Points created by System Restore.
Previous Versions works best if you changed and saved a document, but you want its older version back.
But please keep in mind that not all files and folders can be recovered by Previous Versions - you still need to make regular backups of your hard disk.
Opening, copying and restoring files or folders using Previous Versions
To see previous versions available for a file or folder, right-click it in Windows Explorer and then click Restore Previous Versions.
A window with properties of the item opens in Previous Versions tab. A list of available restore points is listed in Folder versions or File versions section. The Date modified column shows the date and time the item was backed up. But if the section says "There are no previous versions available", you are out of luck.
Locate the version you might want to restore and check it first by clicking Open button to ensure it is the correct one.
For folders, Windows Explorer opens and you can use it like any other such window - open or copy the previous versions of files or folders you need. Luckily, deleting and moving items is not possible in Previous Versions. You also cannot create or modify files there.
Copying a previous version of a file or a folder to another location for comparison
Because restoring a previous version overwrites the existing file or folder, you might want to copy the older version to another location for comparison. To do that, click Copy... button after selecting the version you want to restore.
Windows offers your personal folder (this is not your Documents folder!) as a destination by default. If this is acceptable, click Copy button. To open your personal folder in Windows Explorer after this, open Start menu and click your user name in the right column (just above Documents).
Restoring a previous version of a file or a folder to the original location
If you are absolutely sure that you want to overwrite the existing file or folder with the previous version available, click Restore... button.
Please note that if your current file or folder is not available in another restore point and you have not copied it elsewhere for backup, you cannot recover it after this!
Windows will warn you that the action cannot be undone. Click Restore. Oh, "märts" is March (the month) in Estonian language. Windows seems to mix up languages a bit if you set your Regional Settings! 
After restoration is complete, a success message will be displayed. Click OK to close it.
If you still have not set up automatic backups in Windows Vista or 7, I strongly suggest to do so. 
