What does Time Machine back up?

I have been having some issure with my Macbook Pro. When I hit the space bar sometimes the cursor will go the beginning of the text or sometimes the page will jump around... Support told me if the problem continues just to reboot the computer. My question is that I have some timemachine backups but it seems the file size of the backups is not as large as all the fiiles on my HD... What does Time Machine back up and will I be losing anything if I restore my computer from a time machine back up?