For individual apps, Titanium backs up the app and data. If you restore it can restore app only, data only (if app already installed) or both.
For batch operations you can back up categories, such as user apps (which will include their data), system data, etc. This differs from a recovery backup because it's still backing up a lot of separate files rather than making images of the relevant partitions, and because you can't use it to replace a ROM, just restore apps and their data when the ROM is working (and conversely, you can't restore an individual app or its data from the recovery backup, or at least not using recovery - Titanium Pro can actually extract this from some recovery backups).
