Time Machine storage for backups.

Hello
Quick question: I've been using an external USB drive as a Time Machine backup disk since I bought my MacBook Pro 13" in 2009. The MBP hard drive is 250GB whilst the external hard drive is 80GB. I've only just reached the point where the MBP's disk has just over 80GB of data on it.
Now I know that Time Machine has been deleting older backups on the external drive for some time because the disk is full. I realise that it deletes older backups because it is the multiple versions of backups that are taking up the drive space.
However, what happens when the total amount of data on the MBP drive exceeds the storage capacity of the external drive? I haven't asked it to exclude anything from the backups and as Time Machine makes a complete copy of everything on the MBP drive, how does it manage when the external drive is not as big as the data on the computer's drive?
I do realise that I may just have to buy another bigger external drive to deal with what was an inevitable problem but I'm curious as to how Time Machine is continuing to back up without any apparent problem.
Thanks for your help.

Thank Shootist007
I know.
What I was curious about was why Time Machine wasn't telling me that and was happily going on to do backups without any error messages.
Thomas's reply probably explains why so before I do get to that point, I will go and get another hard drive...
Cheers

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    Message was edited by: Stuart Lawrence

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