How do I remove data from my airport time capsule?

If you are selling it and want to safely remove all the data.

Open the airport utility and go to the Disk Tab.

Select Erase and do Zero Out Data.. it will overwrite the disk. Expect it to take between 12-24hour to do this.

If you need it erased for yourself the quick erase takes only a minute and just wipes the indexes. Perfectly fine as you will then overwrite the data on it.