Hi Tim,
From what i've heard you cant back up over airport at the moment, before leopard was released apple said it would be possible but once it was released that function has been dropped.
See the link:
http://www.appleinsider.com/articles/07/10/26/appleyanks_wireless_backup_from_leopard_lastminute.html
Also Leopard 10.5.2 is rumored to be coming soon so i suppose that feature could possible come along with that update. but that is just a rumor!
Finally i have just received my iomega 500 GB, FW400 for £99.99 from the apple store.
for £40 more you could get the FW800 version which apparently doubles the speed, i decided it wasn't worth £40 extra.
I read a lot of good reviews on the US apple store about it so decided to buy. So far it seems like a good piece of kit, it is fairly loud compared to imac, but imac runs almost completely silently. the firewire cable that comes in the box isn't very long, i intend to buy a longer cable and move the drive away from my desktop.
One more thing if your thinking of getting a macbook i would wait until the end of january, I'm pretty sure apple is releasing something and it's been a long time since a proper macbook update.
Hope this helps, if you like i can let you know how the drive is after i've had it a bit longer.