Timestamp backup uses the file timestamp to determine if incremental backup should include the source file or not. The source file will be copied only if the timestamp on the file is later than that on the destination.
Archive Bit backup is similar to how Windows perform its backups and is the preferred method for backing up Windows. It uses an archive bit for each file to determine if the file has been backed up already or not. Once the file has been backed up, the archive bit gets cleared, so the file will not be included in future backups.