Comparing Time Machine and Cloning utility for Mac OS X:

Time machine keeps both the original file and its recently updated versions. For instance, a text file that underwent few updates 4-5 times in a week, will be backed by Time Machine every time the update was done, keeping the oldest and most recent ones. A general question arises: Will the Time Machine end up loosing all the space due to multiple updated files? The answer is NO, Time Machine is good at managing drive space, it removes the old backed up files by its own and thus only keeps the most recent ones.

TM does not offers any archive of the files that have been updated many times. Forget about the original ones that might got replaced over time with the latest updated file.

When cloning comes to the picture, everyone knows it can be easily done with the help of a cloning utility like Stellar Drive Clone. This utility builds up a mirror image of the hard drive, resulting in an identical copy of the original drive, containing each file for only once. Like Time Machine, Clones too can be made to take incremental back-ups keeping the most recent file on the drive. If several files on the drive are updated and again cloned on the destination drive then the cloned copy holds the most recent information for that particular file. Unlike Time Machine, the cloned copy doesn't hold the original as well as updated copy, instead it overwrites the old file with the new one. Compared to the Time Machine, the cloned copy of the drive uses less space because it has to hold only the latest updated file rather than the files that were updated days or weeks ago.

Due to multiple files on the time machine the overall size may exceed, but in cloning as files are most recent, the size remains the same. E.g, 500GB drive will require the size equal to another destination drive.

Cloned copies are mirror images of their original source making them bootable. Now, if the Mac responses are negative and a failure occurs, then you can restore the Mac back to its last settings with the help of the cloned copy.

Making a clone copy of anything is totally dependent on the user's choice of what exactly is to be cloned and when. It is certain that clone copies can't be produced every time. 

Being automatic on other hand, Time Machine handles the incremental backup smartly and does not require the user to monitor the backups (like in cloning). The backups are taken every single hour by the TM.

Cloned copy being a separate back up can be kept away from the system, thus if the whole system faces a physical disaster like fire, the cloned copy still remains secure for further use.

My Mac OS X & different ways to back it up

We humans need to act like ants, which are the hardest working creatures on the planet. Like ants collect their food stuff for the winter season, we too can back-up our entire hard drive data and contents to overcome a near future obstacle. These uninvited obstacles may be in the form of hard drive failures, data corruption, system inaccessibility, or theft. Although I don't have the exact figures of such obstacles but I could only estimates that thousands of Mac users go through the pain of data loss due to sudden malfunction of the Mac machine, software gone bad and theft. Such circumstances may not be under control of any user but we can act beforehand to at least ensure the content of the hard drive remains accessible by implementing a back-up plan.

Components of the back-up plan include two basic requirements:

• The system hard drive (source) and,
• an external hard drive (destination),
• Third back-up process may include the use of online storage Medias which are becoming popular day-by-day.

External hard drives are the accessories which are most used by the users, after all who doesn’t require having additional storage capacity. 

1.Imaging the hard drive: With the help of a non-Apple utility, we can choose to create an image file of the drive (important data). Once the imaging is made it may be stored on the source itself. However how wise it would be store on the same system taking the inaccessibility of the Mac on account. This can be done by saving the back-up on an external hard drive and should be done on weekly basis.  

Stellar Drive Clone 2.0: Ready to create an image file of hard drive or volume

(The chosen drive is imaged to the user's location)

2. Cloning the hard drive: Another activity you could do in place of imaging is cloning the source to a large destination (A destination drive larger than source is always required to make a clone). What is good about the cloning is it creates a similar copy of the source hard drive which is in the ready to use form.

Take Note that: Cloning erases all the content of the destination drive. If destination > source drive then you can also expand the volumes located on destination drive. Cloning creates a bootable DVD for the system helpful to boot the Mac if inaccessible. 

3. Time-Machine backup: It’s simple to do by connecting an equal or bigger external hard drive to the Mac system. Making way through System Preferences<<Time Machine, double click to launch it and switch the time machine ON. See the 'Select Disk' option, you need to click and select the connected external drive. All done, only the check box located at below needs to be clicked. 

Wikipedia: Time-Machine in action can be found in the Mac 10.5 and above versions. It creates incremental backup that can be restored at backward date.