OS X V10.7 Lion :: Moving Time Machine Backup Folders Between Hard Drives?

I'm trying to do a favour for a friend. She has a 320Gb external WD hard drive which she used on her Macbook to backup with Time Machine. It is not partitioned and she keeps the "Backups.backupdb" folder with other personal folders she throws in there. Recently she sold her Macbook and all that was left was this hd. She now only has access to her work pc but it won't recognize her hd as she's apparently formatted it with option "Mac OSX Journaled". So she gave me her hd to backup and then format to FAT32. 

I've been a Mac for a long time but have never used Time Machine, I simply copy my important files into an external hd as I feel it's cleaner and I've never really had HD problems with any Macs I owned. So basically I have no idea how this works. I managed to copy all of her personal folders into my hd as well as the one labeled "Latest" on the Backups.backupdb folder ("Latest" is actually an alias). But I can't seem to be able to copy the rest of the backup folders. I can copy them into my computer hard drive, but each folder (I'm talking about the ones labeled with dates, there are 35 of them) is around 70Gb. Now, of course that doesn't make any sense, as it would be impossible to have 35 folders of 70Gb each in a 320Gb hd. I can only assume they use aliases as well, but when I try to copy them individually or as a whole (enclosing folder) Finder says I have no space available for that (even though I have more than 320Gb available). 

Now, in my mind it's completely idiotic to keep any folders other than the Latest one. She doesn't even own a Mac anymore. But she's freaking out that I'm going to lose her entire life (she's that kind of person). I don't want to open the Time Machine app because like I said I don't use it on my computer and these are not my files, so I do not in any way want to sync with this hard drive or backup to it. I'm on a 21" 500Gb iMac running 10.7.3.