I shall try to clarify.
The rotation is actually 30 days between full backups and yes, we are aware of the fact that we would have to select every single incremental after the last full backup to do a full restore of data. We have a very strict data retention policy which requires projects to be cleared off the server after 30 days anyway. In the two years we've run this, we've never had to restore off an incremental, because we ran backups every friday. HOwever, we are changing the rotation schedule to lower our window of failure. Since these are backup files, and this is a high end SAN connected to the box, restores (which in testing) restored very quickly, even the full and subsequent incrementals Servers are fully redundant. OS is only true source of failure (even redundant raid controllers)
Anyway to answer all the questions. Yes, the job is setup to append the job, overwrite if no appendable media is available. This is the correct setting, because after the 30 days has expired and the next full backup has run, I would like it to overwrite the incremental files as opposed to creating new ones every time like it is doing right now.
Does this help a little.. Thanks!