In version 3.2x click on the "Excl" button in the advanced backup entry editor to add the folder names there. With version 3.25d and above, this functionality has been enhanced to support full wildcard specifications as well. 

Both Versions:

In version 3.25d and up (including version 4.0), the exception (in 3.x: "exclude") list can contain any of the following:

• Full pathname (C:\Windows\Temp)
• Pathname without drive letter (\Windows\Temp) (ver 3.25c+)
• Bare folder name (Temp) (ver 3.25d+)
• Folder name relative to backup folder (Windows\Temp) (ver 3.25d+)
• Wildcard specification (C:\*\Temp) (ver 3.25d+)

Note: If wildcards are used, the same rules apply as in file specification criteria: multiple criteria may be used on a single line, separated by spaces.  If one of the criteria contains a space it must be included in quotations:

"C:\My Documents\My *" "C:\Old Data"

Exception lists may also contain FileBack PC variables.  If necessary, separate multiple folder entries in a variable with a semicolon (;):

{FB$TEMP};"C:\Documents and Settings\*\Temporary Internet Files";*\Archive