soybean - Okay, I understand everything except how to rename a file and then see if I can restore it. How do you rename a file?
Open Windows Explorer (see paragraph below on using Explorer), navigate to the folder containing the file, right click on the file and select Rename. The purpose of doing this is to make the backup/restore software you're using think the file does not exist at the location from which it was backed up and it will go ahead and replace the file from the backup image. If you try this without renaming, the restore procedure should stop and tell you that the file already exists, and then ask whether you want to replace it. By renaming the file before starting a test restoration, you're simulating a situation where the original file you backed up got inadvertently deleted, lost, corrupted, etc., and you want to restore it from your backup. So, think of this testing of restoring a file as your fire drill, or tornado drill. You want to know you're prepared for the actual disaster by practicing before it happens.
To open Windows Explorer, you can right click on your Start button and select Open Windows Explorer. If you're not familiar with Windows Explorer, this reference should be helpful:
http://www.edu.pe.ca/journeyon/pro_d_pages/file_management/FileManagementinWindows.htm. All computer users should know how to use Explorer; it's a basic tool for folder and file management.
Note that if you use incremental backups, you can have multiple versions of files in your backups. An initial, full backup would contain all files in the folders selected for backup. Incremental backups following a full backup will contain later versions of files for files that were changed since the initial/full backup.