Yes, it can. You access it using the utility. One word of caution though: initial access time is annoyingly slow. Why? Because when not in use, I believe the TimeCapsule hard drive spins down. When you access it, you need to first wait for it to spin up, so you'll be looking at that damn pinwheel if you access the drive alot.
So for backup only, it's fine. If for constant access, you should seriously consider another option.