I would assume with the single band then, as John has indicated, everything will slow down with all the devices I have on the network (2 iPhones, 2 IPads, a printer, Apple TV and a MBAir). Is this correct?
Not sure what you mean by everything.. think of it as pipes.. you have a 1/2" pipe to the outside world.. (unless you have a fibre or very high speed cable connection) which connects to your home 2" pipe.. Each device at home shares the 2" pipe.. but if all of them are trying to get through the 1/2" pipe to the internet.. then having a 4" pipe at home as a solution will do nothing at all.. you are bound by the 1/2".
If I had the dual band how would that work with the number of devices I have and I assume I can assign a different network on the dual bands? Correct?
Some things work only on 2.4ghz and others are dual band.. you can setup the TC with separate SSID for each band and connect to only that band. This will help local network connections.. (you now have two separate pipes, and one is 2" and the other 4") but still not help internet. which now feeds into a manifold with all the pipes joined.. ie the new TC. It will also not have long range. 5ghz is not good unless up close and personal. So it is not a pancea to all problems. So in the next room the 4" pipe goes through a 2" reducer.. and the next room goes through a 1" reducer.. and after that it gets a rusty old 1/2".
BottomLine is the first generation TC too old for me to be using and should I consider getting an updated TC. The harddrive in my TC has crashed so I only use the TC for my networking.
You have a TC which is effectively an older model Airport Extreme. A new TC will at least offer you improvement in having network based TM .. although that is useless for anything except your MBP. You might as well buy the latest AEBS as it is cheaper and more robust.. external power supply works better and overall the AEBS is slightly better in terms of wireless than TC for whatever reason. They are almost identical hardware.
If you want higher speed for more devices.. the trick is not using dual band.. it is using more wireless points. Connected together with ethernet. (or ethernet substitute like Ethernet over Power.. EoP.) You can configure them for roaming and cover your house better.. each product connected to its own WAP will then get excellent connection to the rest of the network.. but in the end.. to the internet.. you are back to the 1/2" pipe.