Lion actually makes local snapshots by default but the option to turn this on and off is quite hidden and even with local snapshots enabled the huge on/off swit

Lion actually makes local snapshots by default but the option to turn this on and off is quite hidden and even with local snapshots enabled the huge on/off switch for Time Machine in the preferences shows that Time Machine is turned off. All other Time Machine behavior is unchanged. This is, I think, quite a clever solution to the problems you were mentioning. (This might still change before they release Lion, though.)