Backup takes 800GB? Manage Windows Backup Disk Space

How do I control how much disk space my Windows Backup takes up? I have a 1TB external disk for backups and other files. My computer's HDD only has about 250GB capacity. I don't know why my backups file got so bloated. What should I do?

I see that I can delete the older backup file: 22-Oct to 11-Nov. But read the text.
""Deleting previous backups will free up space on your backup location."
So far so good.

Then it continues, "All files backed up during the selected period will be deleted."

I'm pretty sure the text is just badly written. I guess that means the backup-files (on the backup drive) will be deleted. They couldn't mean that the original files (on my data drive) will be deleted. That sure is a scary possibility though. How do you understand this?

System: Windows 7 Enterprise

ScreenCap below

Yes, it is perhaps, badly written, but true. All files in the backup period from 22-Oct. to 11-Nov. will be deleted. Not to worry, though, because those same files are backed up in a later backup period from 11-Nov. to ? It is safe to delete older backup periods.

Windowsimagebackup is the HDD image that was created when you ran backup in Windows 7. You should also have a MediaID.bin file as well as a data backup file. The WindowsImageBackup cannot be opened unless the file is mounted. System Image - Extract Files Using Disk Management

webmanoffesto said:

So "WindowsImageBackup" is the backup file?
What do you think "Name-PC-Home" could be?

No, "WindowsImageBackup" is your system's image. Basically, it's a carbon copy (snapshot) of your entire C:\ drive. There should be 2 other files on your backup drive, a MediaID.bin file and the other one is your data backup. It could be named anything.
Here's an excellent tutorial on Windows 7 backup and restore.
How To Use Backup and Restore in Windows 7 - How-To Geek