This is wrong. Time Capsule can be mounted as a hard disk (AirDisk) and can be used for both Time Machine (backup) and file storage. Due to its reliance on Wi-Fi and ethernet, it may not be suitable for high-speed access (e.g., DV editing/importing). Although via Gigabit, perhaps it'll be fast enough. As for it taking up space, 1 TB should be enough for most users (at least for the time being).