Volume Snapshot Service
Volume Snapshot Service (VSS) is a feature that allows taking a "snapshot" of a file or folder on a volume. This is used in Windows Vista to power the Previous Versions and System Restore features, but it's also used in all versions of Windows to allow backing up of files even though they are in use.
The snapshot service creates a read-only "snapshot" of the volume, and allows applications to access that snapshot without having to deal with any file locking issues.
This feature was added in Windows XP as of Service Pack 1. Originally, only temporary snapshots could be created for the purposes of backups.
With Windows Server 2003, the ability to allow persistent snapshots was created, with the name Shadow Copies for Shared Folders.
Windows Vista added the ability to save shadow copies for all users, but only Vista Business or Ultimate users can access those files via the Previous Versions interface.
Dual Booting Issues
If you dual-boot with Windows XP, it will destroy the shadow copies created by Windows Vista. You'll need to use a registry hack to prevent XP from being able to see the Vista drive.