Yes, and no. Certainly Time Machine can back up your images, but it is in a compressed format that in the event of a problem you need to reconstruct the files and folders from the TM archive.
I'm not clear what you mean by this. Time Machine backups are not "compressed." They're just the files. However, there are some UNIX "tricks" used (specifically, hard links), to keep files from being stored every single time they're backed up, if they don't change. But this doesn't involve compression.
The easiest way to restore from Time Machine is just to use the menu icon and restore to a specific point in time. If for some reason you don't want to do this, you can navigate to the backup location and go to the folder called "latest" which will point you to the directory that looks exactly like the last backup you made. You could copy that directory to the restore location and you're good to go.
Carbon Copy Cloner (or its nearly identical analogue, SuperDuper!) are conceptually simpler in that they're just a straight "clone" of your drive. The big downside are that they're mainly manual processes, and so it's highly likely people using them may have to revert to a backup that's days or weeks old. "Do it every night" is a lot of extra work over Time Machine, for no true benefit other than simplicity if you don't want to learn.
I'd also recommend an offsite backup. On OS X, I've found BackBlaze to be quite good.