While at MacCamp this weekend, I was trying a spotlight restore (open Time Machine, use spotlight to search for an application, restore) and it did something very odd: It restored into the same time machine folder the application was in.
This created a very broken partial application and now time machine fails to backup. Also, one of the broken apps contains a circular reference of symlinks, so something got broken very badly.
Caveat: This time machine was started on a beta of Leopard, so it is possible that had something to do with this failure. I’ll report more later.