Your command looks fine. Are you planning on using variables for the date part? One trick - that data is going to grow and grow on you. What's your policy for how long you will keep it?
I've found for data of lesser consequence, that it's actually better to name backup files things like SUN MON TUE, and let them overwrite "next week" to control disk space a bit better an infer quickly how much backup you have online.
As to your question about restoring, it's usually something like tar xfz TARFILE.tar.gz ... but you should get in the habit of reading your tar files first with something like tar tfz TARFILE.tar.gz just so that you can understand what you're actually restoring.
If I recall, you're going to preserve your directory structure the way you're doing it - meaning the restore will create a directory called home/jimmy wherever you choose to restore it.
Don't take my or anyone's advice however; make sure you test thoroughly. The worst case is that it seems like its working but two years from now when you have a drive crash you realize it wasn't...
Call me old school, but why not use dump?