Those are good and valid questions. Let me start by addressing the question as to what exactly gets backed up. ShadowProtect falls into the volume imaging category of backup product (vs. the other common camp which consists of the file-based backup products). This means that ShadowProtect will backup EVERYTHING on the volumes (a volume is a logical area on a disk, and you probably know them as "drives" such as C:, D:, etc.) that you tell it to backup. So, if you tell it to backup C:, it will backup everything on C:, all of your operating system and all files - every single used sector - on the C: drive. Because it captures all of the in-use sectors on a volume, ShadowProtect is capable of doing so-call "bare metal" restores. This means that as long as you have your backup safe on some other drive, if your primary hard disk completely fails this is okay because you can just buy a new blank (hence the word "bare") hard disk and then boot the ShadowProtect bootable CD Recovery Environment and restore your backup image to this new blank drive, and shezam! you're up and running again with all of the applications and data that you had at the time that the backup was created. Now, many users find that it's useful to schedule regular automated backups, and this is easily done with ShadowProtect. What's more, ShadowProtect is smart enough that it knows that if it has already backed up your drive(s), the next backup doesn't need to backup every sector, but merely needs to backup only the sectors that have changed since the previous backup. This saves an enormous amount of disk space for storing your backup images, not to mention time. Such an image, which contains only the sectors that have changed since the previous image, is called an incremental backup image file (as opposed to the initial full or base image file which contained ALL in-use sectors on the disk at the time the backup occurred). ShadowProtect's incremental images are often generated in less that one minute, and yet because the capture all sectors that have changed since the previous backup, each incremental, combined with the previous image backup files, represents the FULL state of your disk at the time the incremental occurred. You don't need to manually "combine" these incrementals when you decide to restore one of them - just specify the image (be it a base or an incremental) for the point-in-time that you wish to restore (or mount, if you just want to restore single file(s) and not the entire volume) and the product will take care of all of the work of combining the content of the specified file and any previous backups upon which it depends. ShadowProtect also has the ability to restore your operating system volume backup image to a completely different computer, and make it boot. This is the Hardware Independent Restore (HIR) feature. It's pretty easy to use - you just check a box for HIR at the time you're setting up the restore job in the booted CD Recovery Environment.
As far as your concern about being able to successfully restore your system, my suggestion is that you first backup your system within the recovery environment. ShadowProtect can both backup and restore images within your live windows operating environment, however, obviously you can't restore over your boot volume while the OS itself is actively in use, which means that for restores of the boot volume you have to boot the bootable CD recovery environment. One nice thing is that you can also perform backups within the booted cd recovery environment, and I mention this because if you successfully backup within the booted cd recovery environment you can be assured that the cd recovery environment contains the proper drivers to see and work with your disks (the disks that store your OS and data, and the disks where you keep your backups). Failure to properly support storage controllers is the only problem that would cause an issue for you, and so as long as you have this verification that the cd recovery environment can successfully see and use your disks, then you have very strong evidence that it can also restore your backups. At any rate, if it can't, you won't be able to accidentally wipe out your OS because you won't even be able to see the disk itself.
If all you care about is backing up a few files, you should probably just use one of the *hundreds* of free file-based backup utilities. If you need the ability to have regular and quick incremental backups, or the ability to do bare metal or HIR restore, then you should request the Full Evaluation (submit the web form) of ShadowProtect so that you can gain access to the Recovery Environment ISO image which you must use to burn the recovery environment CD, and perform the tests I mentioned. Evaluate other products too and use the one that works best for you.