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Rule of thumb for the size of a Time Machine drive is twice the size of the computers HD so it will back up for a year or so before deleting. TM will continue to backup until the drive or it's partition is full. OS Point updates and other software updates obviously make for larger TM backups immediately after.
250gb HD = 500gb TM drive.
I honestly wouldn't put anything else on a small 160gb drive.
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Mid '08 15" MacBook Pro. OSX 10.6.2 
Keep the dream alive: Hit the snooze button.
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