There are a few different ways you can do this, but here's how I do it:
1. Locate the iTunes folder, usually located in the Music folder under your home folder.
2. Mount the Time Capsule disk to the desktop by opening a finder window, selecting your Time Capsule from the Shared list on the left, and clicking the disk icon.
3. Drag your iTunes folder over to the Time Capsule's disk icon on the desktop. This will take a while if you have a lot of content. Might want to plug into an Ethernet connection.
4. Once the folder has copied over to the Time Capsule, drag the original iTunes folder to the trash
5. Open up iTunes, it will give you a message saying your library cannot be found and gives you the choice of creating a new one or locating an existing one. Choose Locate an existing one, and browse to the iTunes folder you just copied to your Time Capsule. Select the iTunes Library file.
Go into iTunes preferences and select Advanced, and make sure the Media Folder location reflects the path to the iTunes Media Folder on the Time Capsule disk, if it doesn't, change it and click OK. Try playing some content to make sure it works. If it does, you can empty the Trash containing your old iTunes folder. I use this method myself, and I've never had any issues with it. One thing to keep in mind is that your Time Capsule drive needs to be mounted when you use iTunes. I find it best to create a startup item in my account under System Preferences.
Hope this helps!