If you run a router then simply use the TC in bridge.
Download the 5.6 utility
Go to manual setup, internet tab and selection Connection Sharing.. off bridged mode.
Wireless is up to you and there are a number of ways to run it.. the best is usually to set wireless to manual setting and make sure it is different channel to the BT modem.. but it can be turned off.. You can still access the TC via the wireless in the BT modem.
I have just had Infinity installed and also have a time capsule.
The way I have set it up is as follows:
Get rid of the HomeHub they provide (to save electricity).
Need to keep the VDSL2 modem (the other box that plugs into the phone socket).
Plug the VDSL modem into the time capsule WAN port directly.
Go into time capsule manual setup via the airport utility
On the internet settings tab:
Connect Using select PPPoE
Account Name enter 'firstname.lastname@example.org'
Password and verify password enter a single space (as in press the space bar once). There is no password, but for some reason it will not accept no password at all, and won't negotiate properly.
I don't have a service name set, and 'connection' is set to always on' with 'disconnect if idle' set to never.
Works perfect, I then use the time capsule as the wifi hub and all my devices connect to this.
I have followed mds1256 accurate steps but instead of working perfectly I have a capsule where green light is steady and airport utility where capsule image is green and internet sign is mainly green but whenever I attempt to open an internet page it goes yellow and only page I get is one from BT wholesale ...service information giving me various reasons why I can't access internet...one being attempting to use a third device. BT tech support tell me I must leave BT hub in place and use an ethernet cable to connect capsule WAN to an Hub LAN. When I try this capsule light remains yellow and airport utility cannot find capsule. BT tech did suggest I get BT technician to come out and sort it at £50 fee. What seems to have been a 15 minute procedure for some has turned into a 24 hour nightmare for me. Any suggestions?