When is a deleted file not deleted?
If this Ars Technica report is accurate, when Windows Vista uses its default setting of "System Protection." In this mode of operation, users' files and folders are automatically copied. These shadow copies are called Previous Versions; they will reportedly be available via a right-click properties menu option called "Restore Previous Versions."
This feature is rife for abuse. AT warns that corporate users will want to be especially cognizant of the feature, since it shadow-copies files on network drives. In addition, any user concerned with personal information security should be aware that Vista will make it possible to restore deleted files (in this case, the folder that originally held the file can be analyzed for "previous versions").
I'm not much of a fortune teller, but it's easy to envision some public relations nightmares as the logical outcome of this "feature." I think the authors of Vista may want to review the rules of data-sharing (the hard lessons learned vis a vis ADS, BHOs, and LSPs).
Ars Technica: Recycle Bin not enough, Microsoft adds "Previous Versions" support on the file system level