Yeah, this confused me a year or so ago when I wanted to do a full recover of my Macbook after playing around with a Unix install. It *used* to be that you restored everything from the TM backup. I hope they've improved it, but at the time it just gave me an error saying it wasn't a valid TM backup. Not a nice message to receive when your laptop is dead and you want to restore, although I have other backups.
Solution turned out to be very easy (after I googled it
). I used internet recovery to install the latest supported OS, then used migration assistant to restore everything else from the TM backup. The laptop ended up back exactly as it was at the time of the TM backup.
Basically, everything that kitKAC has posted above.