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Pau Lo

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vcenter appliance - is it a VM

is the vcenter appliance typically a virtual server of its own, or is the "appliance" installed on top of say a windows server, as you would other server software like sql server?
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Pau Lo

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i was wondering from a backup angle, would you need to backup the appliance itself, or if it resides on another server, would backing up the server it resides on suffice?
Like how you backup the DB for a windows server you can backup the vPostgres DB for Appliance as all the data resides there

There are two KB Articles in VMware for that
http://kb.vmware.com/selfservice/microsites/search.do?language=en_US&cmd=displayKC&externalId=2034505

This is to backup the inventory service DB
http://kb.vmware.com/selfservice/microsites/search.do?language=en_US&cmd=displayKC&externalId=2062682

You can also take a full VM level backup too.
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will a full VM level backup cover the DB as well? Is it really only the DB you need to backup for the appliance?
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Yes Full VM will cover the DB if you are going with the Embedded the DB.
Yes all the inventory and configuration details of vCenter is stored in its DB. If something goes wrong you can always reinstall the vCenter and direct it back to the old DB. Same case with windows vCenter too.
also take a Backup of Inventory service DB.
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is an "appliance" a completely seperate entity to another VM? i.e. you dont install this "appliance" on another VM, just like you would server software?
A virtual appliance is a pre-built software solution, comprising one or more virtual machines that are 
packaged, managed, updated, and maintained as a unit. Customers can easily install and deploy these 
pre-integrated solution stacks. Virtual appliances speed up time-to-value and simplify software development, 
distribution, and management.
The appliance is a "posh" word for a Virtual Machine, which has an Application installed!

It's installed on a Host Server.