psycrosis wrote: Now say I get a terabyte drive, would I be dumb to make a 250GB partition and then back up to another? as my access to multiple drives is limited by my funds.
Having multiple copies of a VM on the same physical drive regardless of how partitioned or what partition they are on while it is one form of short term backing up it is just above not backing up and would not consider it a safe or longer term backup at all since they all reside on the same physical disk there is still a single point of failure to loose everything! 
That said, any redundancy is better then no redundancy at all however doing it that way I'd rate it as a F on a grade scale. Maintaining physically separate backups is IMO the only proper way to provide safe or longer term backups.