Does the time capsule have to be connected directly to the modem, or can it attach to a port on the wireless router?
The Time Capsule can connect to either your modem or wireless router using a wired Ethernet connection.
If you could clarify what your networking goal for the Time Capsule might be.....we can likely give you a better answer regarding your options with the device.
It would help if you could provide the make and model number of your current wireless router.....since the Time Capsule might be the better choice in terms of wireless performance.....if that is of interest to you.