If I needed both a router AND backup storage I'd think of getting one. Since I already had both, I couldn't justify the cost for the mere convenience of wireless Time Machine backups.
I have a Netgear router, but I am not that big of a fan of it. I have read about lots of issues with Time Capsule so I am worried a little bit. It's in my Gold Box so I have to decide today.
Yeah it's not a huge discount, but it's the best price I could find online. Especially since I get free 2 day shipping and no tax. I just have to talk myself into buying it.
I like the idea a lot. The reviews are positive. The price is reasonable, and it's now a full gigabit hub/router. I'd like to get one when my current Time Machine drive fills up (and hopefully sell my current AEBS).
My only concern is that I can't transfer my current TimeMachine backup to a TimeCapsule and pick up where I left off. I can do that with a normal external drive, but the TC.
Matthew - do you have a laptop and a wireless network?
If you've got a desktop and only need storage, you're better served with an additional internal drive (Mac Pro) or USB / FireWire external drive (iMac, Mac Mini).
For a laptop, Time Capsule is an expensive way to add storage, but provides easy wireless access to the drive. No need for an external drive you have to remember to eject before disconnecting (as I do with my MacBook Pro). And Time Machine will work over the network, which is cool.
If you already have an Airport Extreme or USB-capable router, you can plug a USB drive into it for network storage (but not Time Machine storage).
I have two laptops, as a matter of fact (my mom and my sister each have one). I'm sure they would appreciate it. I already bought it and will look into additional internal storage, as my primary computer is a Mac Pro.