I don't understand the point of backing up wallets then.. say I backup my wallet everyday, or week or whatever,
but between the last backup and the latest, I have spent some coins... and then my computer blows up
and I install the last backup... I thought the network was supposed to detect my key and automatically bring me back to the proper amount of coins I should have...
You're focusing on something that isn't the issue. The issue is whether or not you can spend your coins by any method. The reason for the backup is to make it *possible* for you to recover your coins.
if it just give me an invalid wallet... isn't this just as bad
as losing all your coins?
Is dropping $100 bill on your floor as bad as having it burned to bits? No. The former is easily recoverable. The latter is fatal.
I don't get it. This is why I tried this only when I had 0 coins... I figured it might initially show the last coin account from the backup wallet but then update itself through the network to the real amount of coins that specific wallet key is supposed to have? Isn't that how it's supposed to work?
You are focusing on an irrelevant detail. What matters is whether it's possible for you to recover the coins. The cosmetic issue of whether it takes an extra step or two is minor.
A backup wallet backs up your keys. With your keys, you can spend your coins. You are not screwed, and that's what is important.