Reinstalling OS X Lion vs restoring from Time Machine backup
A Time Machine restore will restore to the last point in time in the backup. A fresh install of Lion will bring your machine to new status.

However, if you do a fresh install and tell it to use the Time Machine backup to restore your data, it will also bring it back to the same point in time.

Some people [citation needed] prefer to use this opportunity to do a fresh install and then selectively drag the data they want from Time Machine back again.

However, keep in mind that if you set up a new backup, it could overwrite the old one.