Time Capsule Questions

Just got a time capsule and got some questions. I got it obviously for backup, but I also got it because of it's external hard drive capabilities. Right now I'm trying to make it so that the time capsule is my default location for my iTunes library. I have a couple of questions about it though.

1. What steps need to be taken to do this? I read about different ways to do it, but have been unsuccessful in my attempts (basically because I can't understand how people explain to do it).

2. Can this be done wirelessly? Right now the time capsule shows up as a shared drive and I was wondering how/if I could do this.

I am running OSX 10.5.5 and any advice is good advice. Thanks in advance.

 

It's says that my time capsule is a "read only". So I can't transfer the library over. I'm also trying to do this wirelessly. When you set yours up did you do it via wireless connection or did you plug it in? I don't know why this is so hard for me. Thanks