Ok, so a bit more playing around, I think I know Deep Sky Diver's issue regarding restoring folders.
It appears he was on the right track.
The group "wheel" is a root thing, I believe. Thus, if you try to restore a FOLDER containing a file belonging to the group "wheel", it will fail to restore THAT file, and quit the restore process (anything restoring prior will restore, anything after does not), as the restore process appears to restore with privleges according to teh current user (makes sense).
If you restore a SINGLE file that belongs to "wheel", Mac OS X Lion will actually change the group to your current group, overwriting the 'wheel' group. This further confirms that 'wheel' files don't belong in the home folder (if you try from outside the home folder, it will prompt for admin password, assuming it will try as superuser/root).
This all seems to explain why restoring files with 'wheel' group is not successful. It appears that Lion Time Machine restore processes have changed.
So there are fixes to this. I assume a fix to ALL groups to the suppsoed default of 'staff' will fix this. However, I'm reticnet to currently do it, as my Time Machine backup will probably try to initiate a complete rewrite if I change ALL file permissions in my Home folder (currently, files in my home folder mostly belong to a group named after my username, as occured in TIger - I migrated all the way since Panther, 10.3).
So I'm curious as to what the RESET HOME FOLDER PERMISSIONS does - does it reset all files in my home folder to belong to 'staff'? Or just reset those that aren't my current group of 'username'?
Alternatively, I guess I could find every single file that belongs to 'wheel' ( terminal: find ~/ -group wheel) (as it turns out, most of the files are some really old .webarchive, .ps, and .pdf files from when I printed to or saved a webpage back under tiger or something, obviously operating the process under 'wheel'), and use the command "chgrp". I tested this on ine file and it worked.
Of course, this doesn't solve the "fetching" appearing in info, but I think that's realtively minor - I was mostly concerned with whther a TIme Machine restore would actually restore all my files during a full restore, including the 'wheel' files, or if that would stop the process. I imagine a full restore would actually operate under 'wheel', so there would be no problem.