I copied and pasted this from an earlier response I made not 15 posts below this one...
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it's been answered dozens of times, there was/is/still a big hub-bub about it.
Time Machine at this time will only work (guaranteed) with a USB external drive if connected directly to a USB Port on your computer (or another mac system).
there has been some people mucking around with different methods on trying to get it to work on an Airport Extreme, but it's not always succesful and I wouldn't want to backup all that information wirelessly with the possibility that it could easily mess up...
This was a feature in the Beta tests, and I'm sure it was pulled for a very good reason, maybe in the future it will make a return when Apple sees that it works as it should.
In short, I guess I'm trying to say, use the search function and you could have seen your answer ad nauseum.