Well, this really isn't an issue at the moment but I had a close call I think and am putting this out here for not only my benefit but anybody else who might need this in the future.

I noticed all my contacts disappeared off my desktop and I thought I had lost them because I couldn't re-add them. So I thought I'd restore the backup but forgot that when I was installing Nitdroid that it formatted the memory card and wiped my backup off. No big deal, I have a copy on my PC. I tried transferring it to the backup folder (I created a backup right then to develop the proper folder) but it wouldn't read it.

I figured out that for some reason my contacts just disappeared and reappeared after a reboot but I would like to know if there is in fact a way to restore a backup from a PC using the backup application.

And by the way, I'd recommend backing up to both the internal memory and sd card for the future. I know that I personally hadn't really given it much thought before.