So, I purchased a linksys E4200 about a week ago at almost $200 from best buy and i'm satisfied with it thus far. But after looking into time capsule for backing up and storage for my iMac and MBP it looks like I can use the time capsule as a router for my devices also. Would it be a wise move to replace my link-sys router with a Time Capsule? I'll be using it as wifi, back-up, and storage for both devies.
Depends. It's capable of being used as your main router, but its feature set is a little basic. Unless your needs are very simple indeed, personally I'd stick with the linksys as your main router, but use the TC for wifi and storage.
That's a terrible price for it, do you have a costco nearby? $139 there and many places online. I thought the one I got was horrible though. I went to a Time Capsule but I had a little problem with that too. Seems fixed anyway. All here: http://www.storageforum.net/forum/showthread.php?t=8869
If you have a router already and are only looking for a way to use Time Machine wirelessly, I'd suggest a NAS with Time Machine capability instead of a Time Capsule. It'll have more features than the TC and will allow you to service the disk in case of drive failure. Also depending on the NAS you get, if it's multibay you can set it up for RAID (RAID1 for two bay NAS for example) for added redundancy. Synology makes a great line of NAS units, and the DS211j/DS212j seem to be a popular model at an affordable price.