Do I need 500GB or 1TB?

Time Machine compresses the backups

Not so, they are uncompressed, the file is the same as coming over from your computer. So the others who have said this to you are wrong.

If you use your computer a lot including photos, videos, editing, music etc, I would recommend 1Tb, you will never have enough as they say.

Good advice always says, think how much storage you will need and then double it.

If you are never going to take photographs, digitise your CD collection, create and watch video then no you are never going to fill the disks with just documents.

If you have a good camera, a video camera and lots of CDs then you will fill the disk.

Also, I'm pretty sure that Time Machine looks at the total of all drives it is to back up and if the target volume isn't at least that large it will refuse to backup. So with 750 of possible space you will need to have the 1 TB Time Capsule or it won't work.

Actually no, it doesnt work like that at all.

It will back up whatever data is on the drive. It has nothing to do with the physical size of the drive it is backing up.

The only way that would hold true is if the drive was full to capacity. If it were only say half full, it would NOT use the total space.

IE: if you have two drive with physical size of 750GB, but total space used on both combined were say 400GB, a 500GB TC would be fine.

The only question at that point then is how far back you want your backups to go.

Depending on the kind of new material generated, incremental backups may be rather small, or if you do alot of new stuff they could be large, and would use the remaining space rapidly.

At that point 500GB may still be large enough, if, you do not need a deep archive in case of recovery.

If deep archiving is necessary, either add an external USB drive(s) to the 500GB or get a 1TB and add external drive(s) to that as well.

Maybe I'm wrong. But I thought I had seen a lot of posts with folks saying that they had gotten errors about combined disk size when Time Machine first came out.

But in any event as th3-r3n3g4d3 says the big question is how far back you want to go. I would still recommend the 1 TB.

I have a 160 GB drive almost full, with a 500GB TC. Now our two situations are definitely different, but did I want all 160 GB backed up? No way! I just back up the stuff I want and would be upset about losing, cut it down to ~35 GB I really don't want to lose (pictures, mp3s, my research, etc.) I excluded all Apps, System folders, all the crap that's on a DVD somewhere that I can reinstall.

It should be noted that TM backupd process will pad the aggregate of data to be backed up by approx 20%. It does this to protect itself from the horrors of hitting disk full conditions during a backup.

Thus, if say the aggregate size of the initial backup is 400 GB then, TM backup will look for 400+80 GB of disk space before it will attempt its backup. This really is only significant for the initial backup as it quite likely will be the biggest amount of data to be backed up in one shot.

If you're backing up two computers today, consider tomorrow when you might add a third one.

Let's say you use 2/3 of each HDD. That's 250+125 GB or some 375 GB. Also let's say you your weekly data churn is 2 GB. Thus over 1 year your data churn is 52x2 GB or 104 GB. Add this to the base of 375 GB and you arrive at 480 GB. So a 500 GB TC might last you for a year before TM starts needing more space and will start removing your oldest weekly snapshots.

Now you can play with the numbers all you want to figure out what size of TC to buy.

If I were in your shoes I'd go for the 1 TB TC to allow for some growth. The 500 GB will work for you as well but at the loss of historic data compared to the 1 TB TC when the 500 GB fills up.

As one poster mentioned, how much data history do you want to keep around. You can also exclude data that you feel you can re-install easily from disc/DVDs etc such as 3rd party Applications and even the Mac OS X system files. However, the beauty of TM is that it can be used to re-instate your system to a precise point of time in the past. If you start excluding things you lose some of TM's ease of use and its system recovery features. System files rarely change so they get backed up just once. Of course when you apply a Software Update from Apple this will change some of the system files. Backing up system files allows you to easily back out an Apple software update if for some reason you don't like it. Say you updated from 10.5.1 to 10.5.2 and 10.5.2 turned out to be bad for you. Using the DVD Installer you can easily return to the 10.5.1 state within a few hours.

Unless I'm mistaken, the TC is not a bootable device, so you'll need another Mac with a full OS on it anyway just to access the data on there.

Not true. I was not implying that TC HDD is a bootable device. It's a device from which you can restore your system from as follows.

Using the DVD Installer one simple selects Utilities->Restore from Time Machine backup which then presents you with one or more TM backup HDDs (depending on how many you have connected). In the case of just having the TC one simple connects to its AirPort network or via a direct ethernet connection and the TM backup will show up. You then select the TM backup you wish to restore from and away you go.