Time Machine uses hard links to create a duplicate directory structure without duplicating all the files themselves; only changed files need to be copied.
As I recall, HFS+ was explicitly modified to support directory hard links, which is less common in the Unix world, explicitly to support this feature.
TM also maintains a folder called /.MobileBackups to store temporary backups while your backup drive isn't connected. OS X also maintains /.fseventsd, a log of file system operations that TM can use to perform the next incremental, instead of having to compare each file for modifications.
As I recall, HFS+ was explicitly modified to support directory hard links, which is less common in the Unix world, explicitly to support this feature.
TM also maintains a folder called /.MobileBackups to store temporary backups while your backup drive isn't connected. OS X also maintains /.fseventsd, a log of file system operations that TM can use to perform the next incremental, instead of having to compare each file for modifications.