Previewed at WWDC, launching in the fall.
Time Machine Now Works with Airport Extreme USB Drives
After the release of today's Time Machine and Airport update, several readers report that Time Machine now supports backups to USB drives connected to your Airport Extreme basestation. This configuration essentially reproduces the functionality of Apple's Time Capsule product.
Apple had originally advertised these "AirPort Disk" wireless backups as a feature for Leopard, but this feature was removed prior to its launch. Speculation had suggested that it may have been due to some unresolved security issues, but Apple has made no official statements. While there had been workarounds published, today's update appears to officially restore this feature.