"dump" is only useful if you can 100% guarantee that you will always backup + restore to / from the same hardware with the same disks and the same disk geometries ... E.g. "dump" is OK if you work with commercial UNIX-es and have e.g. your server room full of shiny new SUN server hardware and your storage room full of identical spare parts ...
But for a home user? Naaah, "dump" is too inflexible.
"tar" offers several clear advantages:
1. it does not care about the underlying filesystem ... whether it's ext3, reiserfs, XFS .. for "tar" this doesn't matter the least bit. You can without troubles restore the contents of a "ext3" filesystem to a new filesystem with "reiserfs" or SUN's ZFS or Windows NTFS ... It doesn't matter. It will work. With "dump": NOPE. Whatever filesystem you had when you did the "dump" will be the same filesystem you get when you do the "restore".
2. "tar" doesn't care about the underlying disk geometry. Whether you packed a 250 GB " / " filesystem and then unpack it onto a 50 GB drive ... "tar" doesn't care for as long as there is enough free space. But "dump" cares: If you change the disk geometries or play around with the partitions ... bye bye data, bye bye music collection. Unless I have missed any vast progresses "dump" is still the same stupid program it was 20 years ago and it just doesn't like it too much when you try to restore the dumped filesystem to a different geometry.
3. "tar.gz" files are de facto a universal standard. Anyone can read those files. Anytime. Anywhere. On any platform. Even on Windows, e.g. there are several tools such as WinZIP which are able to open "tar.gz" files and let you access your data. But "dump"? Nope. If for some stupid reasons you don't have the needed tools ready you won't be able to read those backups you made ... and a backup that can't be read is de facto worthless.
I am not saying that "dump" is just plain "bad" ... it has its uses and there are scenarios where I'd rather go for "dump" (see above). But fact is: for the average home user "tar" is the better bet.
Also ... something people seem to misunderstand: With "tar" you do file backups and that's what most people would want. With "dump" you do filesystem backups ... and that's not exactly the same thing.
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