the 2 "Application Data" areas

Could someone explain to me the differences between:

C:\Documents and Settings\Tim\Application Data
and
C:\Documents and Settings\Tim\Local Settings\Application Data

In my testing of portable applications I have found that many leave files/folders behind in:
...Tim\Local Settings\Application Data
which can be deleted without note

Some however leave files/folders behind in:
...\Tim\Application Data
which are backed up by Windows System Restore.

The implication is that Windows considers the files in:
...Tim\Application Data
more important\critical\worthy of backing up
than those in:
...Tim\Local Settings\Application Data

so I'm wondering if anyone could explain to me the difference between the 2 "Application Data" areas.

Thanks,
Tim

[edit: fixed dupped use of the same path, "\Local Settings\, in last example above]