Time Machine configuration...

All...
I'm confused by the instructions on setting up Time Machine.
According to this article and the screenshot, it looks like I should be enabling Smart Guard but also checking the "Do not backup virtual machine" checkbox.
http://kb.parallels.com/en/8827

Is this correct?
Do I need to exclude any folders from Time Machine (specifically, the location of my .PVM files)? Where does Smart Guard store the incremental backup files?
I'm using Parallels 10.
Thanks!

 

I would be curious about this too. Especially if the "Do back up virtual machine" checkbox has to checked or not.