Incremental backup question

If I make a true image backup of a partition that's (say) 5 gigabytes. Then I delete a 1 gig file. If I later want to make a further backup, as I use incremental backups, what happens to the 1 gig file I deleted? What I mean is would I be better off deleting the original backup and making a fresh single back up, or would an incremental backup still be more hard-drive-space friendly?

 

How does it deal with deleted files? On a restore, would it restore the first backup (including the now deleted 1 gig file) and then restore the incrimental backup only to discover the big file doesn't need to be there? Or would it read the incrimental backup up first and know not to restore the deleted file? If you know you've deleted a lot of files after making a backup, there's no point doing incrimental backups yes? May as well delete the lot and start again?