To search for and/or restore items that were backed up, simply open the appropriate folder and click the Time Machine icon in the Dock. You'll immediately see the Finder window display the folder against a space backdrop with copies of it receding into the distance (see figure 2).
Figure 2. Restoring files using Time Machine
As special effects go, this one does have its root in making Time Machine easy to navigate (though the space motif is just there for effect). Each backup of your system is displayed in one of the seemingly infinite windows. The date of a selected backup is always displayed in the bar at the bottom of the screen, along with the buttons to restore an item and to cancel out of Time Machine. You can navigate backwards and forwards using the onscreen arrows to select one of the windows representing a past version of the folder, or you can use the date bar on the right side of the screen.
For locating information in older backups, the date bar is probably the way to go. Each backup is indicated by a white line in the bar (gray lines appear for times before Time Machine was setup). If you place the mouse next to line, it will magnify and display the date and time of that backup. Clicking on a white line will bring you to that backup (with past incarnations of windows flying towards you).
When looking through backups, you can use QuickLook to see a preview of any item, just as you can in the Finder (helpful for verifying that you've selected the right backup of an item). You can also use Spotlight to search for items across all backups. Spotlight will display only a single search result for the currently selected backup, but you can navigate forward and backward through your backups to see that result for each backup. Likewise, you can click through your entire file structure as you would in the Finder from within Time Machine to locate items that you want to restore.
To restore one or more items, select them and click the Restore button. They will be restored in the same location where they were located in the selected backup. If an item by that name still exists in that location (i.e. a more recent version of the file or folder), Time Machine will ask if you want to replace the current item with the backup, keep the current item, or keep both (which will rename the current item adding "original" to the existing name).