First off, the archive bit is typical of Windows and the NTFS file system -- http://en.wikipedia.org/wiki/Archive_bit
. In many file systems, it doesn't exist; and, it has been severely deprecated, because it is not under the control of a particular backup system and can be changed in ways that mess up backups when more than one tool is used, or when a user starts messing with it. See W. Curtis Preston's article "The Windows archive bit is evil and must be stopped
Different backup programs have their own means of tracking what needs to be backed up. Dump, such as ufsdump, tracks when filesystems were last backed up in /etc/dumpdates. Whether something gets backed up in an incremental is determined by whether it has changed since the last backup. For a fairly good description of incremental and differential backups, see How are Backup Levels Defined?
. (I confess to having written the first section of that page and having edited the rest).
There are a huge variety of strategies for doing backups. A common approach is a full backup on weekends, and incrementals on week nights. Another is a full backup at the beginning of a month, a differential every weekend, and an incremental every week night. How long backups are kept also varies a lot. Since I use Amanda, my full and incremental backups are distributed across the dump cycle to even the load (see the description in the link above). I have a dump cycle of 1 week. I run backups every night, and I have a tape cycle of 6 weeks, with some extras on top of that. I also keep periodic archives.