Can I use Backup/Restore to clone a database? Running out of ideas
Yes, backup &amp; restore is a perfectly reasonable way to copy a database.  You will need to use the MOVE option to re-name the files.  Here is an example using a backup of a database called DBA and restoring it to DBA_Test

RESTORE DATABASE [DBA_Test] 
FROM  DISK = N'DBA_backup_2015_01_11_001025_4030475.bak' 
WITH  FILE = 1,  
MOVE N'DBA' TO N'D:\DATA\DBA_test.mdf',  
MOVE N'DBA_log' TO N'E:\LOG\DBA_test_log.ldf',  
NOUNLOAD,  STATS = 5


Kin's concern in the link mentioned by @JohnM is valid.  You will be creating an additional database on the instance that will be competing for resources (depending on it's usage) with your other databases.  However if you are doing this to create another production database that you need anyway this isn't really a big deal.  

I'd only be concerned if you are using it to create a test environment on a production server.  In that case you need to decide if the risks of bringing down your production database while working with your test environment outweigh the costs of another server/instance.  For example if you are testing and blow up your test transaction log you will still cause problems for your production database.

If you need a cheap environment remember the Express is free and if you need a full blown copy the Developer license is usually only around $50-60.  Of course that license is a single person license only, not for production use, but it is equivalent in functionality to a full Enterprise license.