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If I get something like a 1TB drive, can I format half to Exfat, and the other half to HFS+ so I can use Time Machine?
Sure, you just need to create 2 partitions on the drive because one partition can hold one filesystem (or Volume in OS X parlance).
 
Another NAS option appears to be WD My Cloud personal cloud storage. Claims to be windows and mac (Time Machine) compatible out of the box. Has some favorable reviews on Arstechnica and Cnet. One drawback is there's no way to limit the number of Time Machine backups, so unless you periodically manually delete old backups your TM backups will slowly cannibalize your storage space. Anyone here use this?
 
The only downside to ExFAT over FAT32 is that it maintains a single FAT table instead of the two that FAT or FAT32 keeps. The chances of the table getting corrupted is small, usually when power is lost during a write to the table (not the data area). A good backup protects most of the data that case. All drives, including externals, should have a backup.
 
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