I was doing this until one of my external HDDs started giving me problems. I'm going to pick up a new one today.
I need an AEBS of my own as I move soon, but I don't see myself getting a time capsule. It's about an extra $120 for a 500GB hard drive. Fry's has a 1.5TB hard drive made by Seagate on sale for $120. I don't mind the "clutter" of external HDDs in such a case, and I'm all about getting a free terabyte.