Question about time machine

I have a 2007 macbook and just bought a new macbook pro (arrives tomorrow). I have used a WD external drive to back up flies from my 2007 computer. Today as I was trying to back up my files and pictures a message popped up prompting me to use time machine. I've never see this message (could this be because I just upgraded to snow leopard?) so I've never backed up using time machine. The message that popped up said the external drive would need to be reformatted. Will I lose everything or will it all be put back? Should I do this now or wait until I get the new computer?

Pictures are my priority. I want to keep them all, but don't really want to put all the pics on my new computer. I have backed up all the pictures on the external drive and online, so I had deleted them all from iphoto but I haven't emptied the trash. If I reformat the drive and backup with time machine will it back up all the pictures, even the ones in my trashcan?

Time Machine can be told to backup everything. However, I suggest removing the photos from the iPhoto trash first before backing them up. As for the external drive you have, if you format it, everything will be lost. I suggest instead that you purchase another external drive and use it solely for Time Machine.

Another plus for Time Machine is that it can be used to copy all your data and photos to the new MBP. When you first turn on the new MBP it will ask if you wish to migrate data from another Mac. Time Machine is an excellent migration tool. I use it in lieu of the Migration Assistant application.