Apple has just released an update to the Airport Utility and a firmware update to the Airport Extreme base station. This update to the AEBS will enable Time Machine to use disks attached to your base station. In order for this to work you must have the latest version of OS X (10.5.2 as of this writing). Once you update the Airport Utility on your mac, you’ll need to start up the Airport Utility. Depending on how you’ve configured your AEBS, it will notify you that there is new firmware to download and install or you may have to select “check for updates” from the Airport Utility menu.
Once the firmware is installed, you can then plug in your external USB drive to the base station, find your base station in the shared sidebar of finder, then open Time Machine Preferences and Select the drive and you’re done!
In fact, I’m backing up this mac to my AEBS right now. Sometimes it pays to be an early adopter.
PS Remember that you have to have a disk that is formatted (or partitioned) with Apple’s File System (HFS+).
Nine and a half hour later, the first backup from Time Machine completed. My Macbook Pro is a first generation with 802.11g wireless. Your mileage my vary.