Time capsule as an external hard drive

An "external" drive is one in which the drive connects directly to a Mac.....like a USB drive or FireWire drive.

The Time Capsule is a "network" drive, which means that it connects to the network router, and the Mac then connects over the network to the Time Capsule.

Huge difference. Please keep in mind that the Time Capsule was designed to store backups of your Mac using the Time Machine application on your Mac.

While other data can be stored on the Time Capsule, it is not a good idea to do this. One reason for this is that users sometimes want to move data from their Mac to the Time Capsule to create more space on the Mac's hard drive. Once the data has been moved over to the Time Capsule, users then often delete the data on their Macs.

Big mistake. When....not if....the Time Capsule has a problem, the only copy of the movies or documents that the user moved over from their Mac is on the Time Capsule.....and now that data cannot be accessed, and will likely be lost.

A much better solution would be to connect a USB or FireWire drive directly to the Mac and then have Time Machine back up both the Mac and the USB drive to the Time Capsule. This way, you have "original" data on one drive and "backups" on another drive......the minimum that would be required for a backup plan.