The first problem I found was that I did not run the software disk that shipped with the Time Capsule. Having just purchased the newest MacBook Pro last week I thought my Disk Utility was all I needed. If you do not run the new software and use you Disk Utility you computer only recognizes the Time Capsule as an Airport Extreme, after running software it becomes Time Capsule. Restart you computer before trying to back up, if you have a laptop it has to be plugged into power outlet.