If you store database and transaction log files on the same disk drive and that disk goes down, then you can only restore up to the last backup. If the transaction log files are on a different disk and circular logging is disabled, then you can restore database files up to the point of failure by using the last backup and the transaction log files.
RAID systems can protect data and provide failover protection. Microsoft recommends ESA disk storage technology for small Exchange Server 2003 organizations and SAN disk storage technology for medium and large organizations.
Copy and full backups back up both database and transaction log files. Incremental and differential backup types back up only the transaction logs. Full backup truncates the transaction logs.
To recover a damaged Exchange Server 2003 storage group, dismount the storage group and restore it from backup. If transaction log files are available, the databases can be rolled forward to the point of failure.
If you need to restore Active Directory data in a domain controller, for example, when it is the only domain controller in the domain, then you should back up system state data. You can restore this data by booting the server up in Directory Services Restore mode.