Why am I installing it?

Because it wasn't installed by default, or it was intentionally not installed. We haven't had need of it till...

Not to mention the HUGE licensing savings if you are doing per processor licensing.

I'm just going through the process at the moment, moving from a Quad P3-Xeon 700 Mhz to...

I'd say he has set the backup plan to only keep X days of backups, perhaps one day or two days, and that its not deleting the backups over X...