Ask in Lion: TimeMachine / MacBook Pro even - this is workstation territory
I would not use the same drive for data and for backups.
If I had to, I'd make a partition large enough to boot your Mac from though, whether 50-500GB to clone your system.
You should still be able to use Lion's Recovery boot mode.
I don't think there really is much choice in what to format with, unless you want to spend over $100.
Some experts suggest for maximim flexibility a partition 3x the size of the drive being backed up, so that would be 1.5TB. That leaves room for a bootable clone and/or a Lion Recovery partition as well. Disk Utility is pretty good for what you are trying to accomplish, and that has not left a lot of room for competition in the marketplace.