Windows 2008 R2 - shadow copy management and retention

1. Yes you can change the limit up to 512 shadow copies per volume, by using the MaxShadowCopies registry key. You will probably also need to adjust the amount of storage space VSS is allowed to use with vssadmin.exe Resize ShadowStorage. (You may configure Shadow Copies for a volume to back up to a separate volume, such as one with more space. Again, vssadmin.exe is your friend here.)

2. No.

3. No.

VSS on its own works well, but it's pretty basic. Most good enterprise backup solutions make use of VSS on Windows machines. But to get those really granular and fine-tuned retention policies, you'll need to use a more thorough backup solution.