Apple has shipped its Time Capsule hardware appliance, a combination of its AirPort Extreme Base Station with 802.11n and a hard drive, integrated into a single case with an internal power supply instead of an external power brick. The drive is not removable. Time Capsule costs $299 with a 500 GB drive and $499 with a 1 TB drive, somewhat less than the cost of a separate Extreme N base station ($179) and an external hard drive of those capacities and performance. (See "Time Capsule Bundles AirPort Base Station and Backup Disk," 2008-01-15.)

Time Capsule works with Leopard's Time Machine backup software, which treats the base station's internal drive as a networked volume appropriate for archiving files from multiple computers, each of which has Mac OS X 10.5.2 installed. (Earlier versions of Leopard won't work with Time Capsule.)

The new device supports using Time Machine for backups to drives attached to the Time Capsule via USB. This feature was once promised for the combination of the AirPort Extreme Base Station and Leopard, but pulled from Leopard's feature list before it shipped. This angered a lot of early AirPort Extreme base station buyers; see "Time Capsule and Its Associated Rage Factor," 2008-01-17, and Peter Cohen of Macworld. Apple must have tracked down and fixed whatever technical difficulties led them to pull this option in order to enable it - without any specific announcement or fanfare - on Time Capsule. We certainly hope to see a revision to the AirPort Extreme that incorporates this capability.

I received a review unit last week that I ran through its paces for a First Look article for Macworld. I'm writing a full review for them that will appear next week. The short take on my first look is that Time Capsule generally meets the mark: it's pretty simple to set up, and it just works.

In a briefing, senior product manager Jai Chulani explained that AirPort Utility 5.3, which ships with Time Capsule, includes new options for managing the internal drive. The drive can be formatted via AirPort Utility, with an option to format securely. AirPort Utility 5.3 also adds setup features that enable you to migrate settings from an existing base station into the Time Capsule; to set up a dual-band network, with an older base station operating at 2.4 GHz and the Time Capsule set to 5 GHz; and to set up a roaming network with multiple base stations connected over Ethernet. (These last two additions address many of the questions I receive regularly from readers, answers to which are found in my book "Take Control of Your 802.11n AirPort Extreme Network.")

Time Capsule appears on individual Macs running Leopard as a backup target in the Time Machine preference pane. A Time Capsule drive, which can also be mounted as a regular AFP (Apple Filing Protocol) networked volume, works the same as a volume shared from a Leopard system using File Sharing, or a Leopard Server with its Time Machine option enabled.

Time Machine always first performs a full system backup to any new disk, including a networked disk, unless you've used its preference pane to exclude parts of local volumes. For this reason, Chulani recommends that you start your first backup by connecting to a Time Capsule drive via Ethernet before going to bed. He also noted that interrupting the first full system backup adds considerable time when that backup is resumed due to integrity checking on the files that were already stored by Time Machine. A machine set to sleep on inactivity in the Energy Saver preference pane won't rest if a Time Machine backup is underway, which happens once per hour.

Time Capsule works at its fastest over Wi-Fi with a Mac that has 802.11n built in (most but not all systems introduced starting in October 2006), and with the base station set to 5 GHz, a largely unused band that can deliver the best networked performance. If your setup doesn't meet these criteria, you might try plugging in a computer via Ethernet - the Time Capsule is all gigabit Ethernet, like the latest AirPort Extreme Base Station - to speed the first full system backup.

Chulani clarified that the "server-grade" drives in a Time Capsule are the same 7200 rpm drives used for Apple's Xserve servers, and that they have a higher mean time between failure (MTBF) rating than consumer drives. The MTBF for server-grade drives is often 1 million hours (114 years), which is a measure of probability; in this case, that out of a set of drives with similar properties, an extremely high percentage will still be fully functional after several years.

The backups stored on Time Capsule are in the same format as all other Time Machine backups, and can be used by the newer versions of Migration Assistant and Leopard's DVD installer: you can select the Wi-Fi network created by the Time Capsule or be directly plugged in via Ethernet to its network switch, and then choose a backup to migrate settings, files, and applications to a new computer. You can also boot a computer with the Leopard DVD, and then choose the Time Capsule as a network and a source of backups to restore a computer. In the latter case, Chulani said, "it actually gives you snapshots going back in time, and you can pick the specific day and time." While Time Capsule doesn't offer swappable hard drives, Chulani noted that to make a copy of existing backups for offsite storage - in a safe-deposit box, for instance - one simply mounts the volume on a Mac and copies any or all of the backups stored on it to another drive. I suggested that a future firmware upgrade should enable a Time Capsule to clone itself to a drive attached to the device's USB port.