From the Titanium Backup Technical FAQ (no direct link, just scroll down):
If you want to remove apks from the /system/app directory, the best ways to do so are:
The NOTE is the gotcha. This seems to have tricked a number of people (including myself), so I thought I'd post a warning. Do not use Titanium Backup to back up system apps (that is, stock apps in /system/app) if you intend to restore them later. It will only back up the data associated with those apps, not the actual apks.
- #3: What can it back up ?
- All the applications you have installed, included protected ones,
- All the data and settings of these applications,
- Most (or all) of your phone's settings and data.
- NOTE: It will not backup the system applications from your ROM. Only their settings will be backed up.
If you want to remove apks from the /system/app directory, the best ways to do so are:
- From the command line (If you run Velocity, it includes scripts to do this for you. Otherwise, you can use good old 'cp' or 'cat' to copy the apk, then 'rm' to delete it from /system/app.)
- With Root Explorer or a similar root-enabled file manager