Help with time machine Restore not enough space

Hi so i did something stupid in terminal and need to restore my whole computer from my time machine backup, which would be great exept that when i go to restore it time machine says there isnt enough space on my internal hard drive.

1) how is this possible if it was backed up from the internal hard drive in the first place

2) how do i get it to restore?

I can still get to finder and move files etc and run applications but the dock if screwed up.

I have a 128Gb hard drive and the backup was done only the day before, my disk was pretty full but not 100% full.