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Actually since 10.4.x (I think around 10.4.7) you can boot PPC with USB drives. It is slow though to start up, but good enough in emergencies. Note: I have come across some instances of USB drive that don't work for some reason.

Can anyone confirm that TM will work with an internal SATA in a Mac Pro/Power Mac

Confirmed. Been there and done it.
 
If Apple brings Airport back into the Time Machine feature, you'll want to consider something that has USB connectivity if you want to connect it to your network and allow multiple machines (espeically laptops) to back up to the new drive.

Hmmm....but I don't want to connect it to a network, and I don't have Airport.

Edit: Thanks, bxs. That's what I wanted to know!
 
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