One thing to consider is that the new time capsule (with internal drive) is $100 more (2tb I think). Once you factor in what a USB drive costs, it may be worth it to buy the time capsule vs the extreme.
I am glad apple finally officially allows this.
I'd like to add that you have to connect to the drive first by going to the menu bar GO, then CONNECT TO SERVER. Time machine didn't recognize the drive until I did that. I guess it was common sense but its been awhile since I have done that.