Will Time Capsule support Dynamic DNS (DDNS) ?

There is not indication in the specs currently available that indicate the Time Capsule will have a built in dyndns updater client. Based on past Airport Base Station models (none of which have this feature) I would guess the likelihood that Time Capsule will have this feature is small. We'll all find out for sure in a few weeks.

Time Capsule (TC) has a setting in Airport Utility > Time Capsule > Edit > "Use dynamic global hostname" that should be usable with any global dynamic IP updater service like DynDNS. I created a DynDNS hostname account to try this out, and it worked at first, but as soon as the IP address of the Time Capsule changed the TC did not update the IP address with DynDNS as it was supposed to, and I could no longer use it. Therefore, it appears that TC has "some" functionality to support third party DDNS services like DynDNS, but I have not been able to get it to work. If anyone comes up with a solution, let me know.

No. Airport Extreme and Time Capsule do not at all support the service providers you mention (and pigs will fly before they ever will. this is not something that will be changed in an upgrade).

The dynamic global hostname feature of Leopard and new Airport Extremes uses real dynamic dns, conforming to the IETF standard for this, by authenticating with a DNS server such as Bind and updating a record using a protocol very similar to that used by all computers to query DNS records.

DynDns.org and all other similar services do not use real dynamic dns. They use a fake, hacky version that provides a web service over which clients update their IP address, and then their webserver updates their DNS server separately. Their update "clients" do little more than request a specific URL which passes the information of your account and your IP address. You could literally set your web browser to access that URL and completely bypass using their "clients".

The global host name feature in Leopard and new Airport Extremes is based real dynamic dns updating. It relies on having a real DNS peer built in to the system, not some URL posting hack, so these will not work with DynDNS and other such services (the only purpose of such services is to update your DNS entry to point to a new IP address when your IP address changes. Being able to access your computer via your domain just means that the Internet is working - looking up a DNS entry and then contacting the corresponding IP address is just how the Internet works.

I think it is likely that some new or existing DNS providers will start supporting real dynamic DNS. zoneedit.com has said that it plans to eventually (whenever that is).

DynDNS.com supports DNS-based DNS updates: http://www.dyndns.com/support/kb/ddnsupdates_andtsig.html

As for HTTP-based DNS updates being a "hacky" version, I would disagree a bit. The general mechanism has been around for 10 years (1998) and is a pretty set standard between any DDNS provider. RFC 2845 and 2007 which introduced signed updates, the "real" standard was first proposed in 2000. The HTTP-based update system is in process of documented which you can see at http://www.ietf.org/internet-drafts/draft-jennings-app-dns-update-00.txt

HMAC, the basic algorithm for DNS updates over DNS is a pretty lightweight cryptographic scheme compared to SSL. It's one reason that we do not change how our update clients update DNS.

I'm also currently interested in both the AirPort Extreme and dynamic DNS. This discussion prompted me to research "proper" dynamic DNS, and from this web page http://www.dns-sd.org/ClientSetup.html I gather that the nameserver in question needs to be RFC 2136 and RFC 3007 compliant.

I'm struggling to find any hosted nameserver or DNS solution that advertises itself as having these capabilities. Anyone heard of one? I really don't want administer my own on a hosted virtual server, as this page suggests: http://forums.knownhost.com/showthread.php?p=6281.