If I do a differential backup of a SQL Server database, what am I backing up? Will the differential backup truncate the transaction logs, or must I run a separate transaction log backup to truncate the transaction logs?

A differential backup makes copies of data pages that have changed since the last full database backup. This type of backup isn't related to transaction logs or transaction log backups; you still need to perform those separately. With differential database backups, you can make more frequent backups because differential backups are smaller and faster than full database backups. And making frequent backups decreases your risk of losing data. To learn more about when to use differential backups and how to implement them, see http://msdn.microsoft.com/library/default.asp?url=/library/en-us/adminsql/ad_bkprst_7tv7.asp.