When introduced, Apple described the 500 or 1 TB drive being used within Time Capsule as "server grade", and indeed continues to tout it as such today on its website.
Time Capsule is your one place for backing up everything. Its massive 500GB or 1TB server-grade hard drive gives you all the capacity and safety you need. So whether you have 250 songs or 250,000 songs to back up, room is the last thing youll run out of. And considering all that storage and protection come packaged in a high-speed Wi-Fi base station starting at $299, data isnt the only thing youre saving.
While it is unclear what practical impact the use of consumer drives will have on users, the advertising discrepancy has been alarming to some users.
Update: According to TidBITS, Apple has clarified that their assertion of "server-grade" is related to mean time between failure.
Chulani clarified that the "server-grade" drives in a Time Capsule are the same 7200 rpm drives used for Apple's Xserve servers, and that they have a higher mean time between failure (MTBF) rating than consumer drives. The MTBF for server-grade drives is often 1 million hours (114 years), which is a measure of probability; in this case, that out of a set of drives with similar properties, an extremely high percentage will still be fully functional after several years.