Part of the Macworld 2008 Keynote post-mortem. Time Capsule is Apple's wireless hub + backup drive all-in-one product. It provides fast wireless networking: 802.11n. It provides a large, "server-grade" hard drive, accessible wirelessly. (By "server-grade" they seem to mean 7200 rpm, SATA.) You can use this hard drive to make Time Machine backups from all your Macs (yes, more than one can backup to the same drive, wirelessly). It also provides a USB port for another device (a hard drive, a printer, or a USB hub) to be shared wirelessly.

Time Capsule is a big advancement from the previous 802.11n base station for one reason, Time Machine (the backup software) would not work wirelessly before. That's great, for the internal disk in Time Capsule. What I can't find out, however, is whether an external hard disk attached to Time Capsule's USB port and shared wirelessly will be compatible with Time Machine.

That would make all the difference to me.