Contrary to popular belief, Time Machine does not require a second physical drive (or network drive) to store its backup files. It seems to be quite happy backing up to a secondary partition on the primary hard drive.
Use Disk Utility to create a dedicated HFS+ partition for Time Machine that is as large or larger than the partition(s) you want to back up (Disk Utility in 10.5 allows live resizing of the active system partition - yay!). After the partition has been created, use the Time Machine preferences pane to select it as the backup destination.
When you select the backup partition, you will receive a warning about how backing up to the same physical disk is not a safe as backing up to a second physical drive, but you are allowed to click through and do it anyway.
As warned, using a secondary partition as your backup does not provide the same hardware redundancy as using an external drive; however, for laptop users especially, the convenience of being able to store a "previous versions" backup on the internal drive might outweigh the risk. (If you do backup to the internal drive using Time Machine, make sure to keep a clone backup image on an external drive for disaster recovery.)
[robg adds: This previous hint explained another way to use a partitioned drive for Time Machine -- in this case, on a second drive with a separate bootable partition on it.]
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