My mistake. Meant to reply to snorris3. Text is repeated below:
Can I still use it as a back up device? My new modem is also the router.
Yes you can.
The best way (and really the only way) to set up the Time Capsule would be to connect an Ethernet cable from your modem/router to the Time Capsule.
The Time Capsule will produce a wireless network by default, but if you don't want to use that network, it is a simple matter to turn off the wireless on the Time Capsule and use it only as a hard drive for backups.
I would be very surprised if the Xfinity modem/router would even come close to the wireless performance of the Time Capsule, but that may be another discussion.
If you elect not to use the wireless on the Time Capsule, then you will be backing up over the existing wireless network that you already have.
That would be a shame, since a third to half of the total cost of the Time Capsule is tied up in the wireless router portion of the Time Capsule. If you want to use the existing Xfinity wireless network, you could save yourself quite a bit of money by simply connecting a USB or Firewire hard drive to your Mac for backups. But, it's your call.