What happens with my external drive upon using Time Machine? So I got a USB drive I want to use with Time Machine. This USB drive has some files of mine.

If Time Machine creates the backup in it, what happens to such files? Are they deleted?
Two things happen:


Time Machine sees if the format is acceptable and makes a change to enforce enhanced security on that drive if needed.
Time Machine makes a folder named Backups.backupdb if needed and makes a folder for each machine that uses that drive.


Assuming you don't have a Backups.backupdb folder - then everything on the drive won't be touched by Time Machine. If the drive isn't in a mac format, you may be asked to erase the drive and reformat it. Do use care and read any messages carefully before you start that first backup.

Full details on this is at http://support.apple.com/kb/HT1427 - look for the section titled Changing your backup disk about a quarter of the way down for the restrictions on which format drives are supported and which need to be erased.