Does time machine work with different types of external harddrives other than Apple's? Because the Apple time capsule hard drive starts at $300?

Yup, I have the Airport Extreme (router) and then attached to it an iomega hard-drive. There could be formatting issues if you use some older hard drives so get a new(ish) one if you can.

You can attach any USB hard drive to your computer. The Time Capsule is different because it allows you to back up your Mac wirelessly over the network.

Wireless backups over Airport hard drive sharing (aside from Time Capsule) were buggy for a long time, and Apple intentionally made it difficult to do by accident. The recent firmware updates might have fixed that, but I wouldn’t bet my data on it.

“intentionally made it difficult to do by accident.”

* tease *

$300 may be expensive for a 500GB hard drive, but you’re also getting an airport extreme with that same money. The ability to do it all with one device wirelessly is nice, but if you have a desktop you can simply plug a hard drive in and let it do it’s thing. You can do the same with a laptop but if you want to stay mobile I’d recommend at least a hard drive plugged in to an airport extreme or express to keep everything wireless.

Time Machine will work with any external HD- in fact, when you plug any HD in for the first time, you’ll be asked if you want to use Time Machine with it. However, make sure you have a big enough drive- at least 500G.

What crisw said. Every time I run SuperDuper! it asks if I want to use my external firewire drive for Time Machine.

You can connect any external hard drive directly to your Mac to use as a Time Machine backup. You can also connect a USB drive to an Airport Extreme and use it as a wireless Time Machine backup for several MAcs. Apple does not support wireless Time Machine to anything other than it’s own Time Capsule, but it does work. I’ve been using it that way for some time now.

Time Machine should be considered supplemental backup. You should still do full backups regularly with something like SuperDuper or Retrospect.

I would recommend you get the Airport Extreme Base Station, essentially the Time Capsule without the internal hard drive. You can connect an external USB drive to the Airport Extreme which can be selected as a Time Machine backup volume.

The Airport Extreme is $179USD + a 500GB USB hard drive for about $90USD = $269USD.

This is only a little less than the Time Machine but the advantage is that the setup is more flexible (you can use the drive elsewhere and/or change your backup hard drive for more capacity in the future).

You can also save another $40 by getting a Refurbished Airport Express unit for $139 and/or a smaller hard drive to get it under $200. Refurb units from the Apple Store are excellent – they have the same warranty and are in indistinguishably new condition. I see it’s out of stock now but if you keep waiting it’ll eventually come up again.