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File History consolidates the Windows 7 backup program and the Previous Versions feature into a single tool that automatically keeps backups of your important files, typically on an external disk drive. If this feature is enabled, you can recover a deleted file or restore a previous version of a file very easily.
One of the options available when you plug in a new USB flash drive or external hard disk is Configure this drive for backup using File History. You can enable or disable these automatic backups and fine-tune what's backed up from this desktop Control Panel window.