Dave:
Understand about the non-disclosure stuff. However, I am more than technically curious about Time Machine having to have a dedicated hard drive, or at least a very large partition ... if it's going to keep around various versions of every Word document back to the days of when 10.5 was first loaded, or whatever -- that could be years.
If that is a valid technical assessment, and especially if you are commited to keep SD around, why would you ever need Time Machine data for more than a week or so (assuming you smart update a .dmg every week).
John Love