One of the main pain points for WSS V2 is the lack of per item recoverability in document libraries and lists. This problem has been recitified in V3. By default now, user has a recycle bin on a particular site that allows that user to recover items that they have deleted. These items include documents, lists items, document libraires and lists.
By default the user recycle bin retains deleted items for 30 days before documents are purged. There is a secondary recycle bin for site collection administrators that will contain items that have been deleted or purged from the user's recycle bins. This secondary recycle bin is accessed through top level site administration under site settings.
Administrators have the ability to disable either the user or secondary recycle bin and define the retention period by using the Web application Settings link on the Application Management tab of Central Administration. The ability to configure both recycle bins, their default settings and the entire architecture ensures that IT doesn't need to focus on per item recoverability in the this coming version of WSS and MOSS07.