Time Capsule via direct ethernet for backup - also WiFi to extend network range

I found the Designing_AirPort_Networks_Using_AirPort_Utility.pdf document available in the apple support pages to be very usefull in explaining how networks can be set up and what you can/cannot do.

You can think of the TC having two parts, the wireless/router part works just like any Airport extreme, and a hard drive that hangs off the network that anyone on the entire network (wireless or cable) can connect to. Any device connected to the TC LAN ports will connect to the TC hard drive regardless of what wireless mode the TC is set to (an extender or access point) .

If you can connect the TC to your network by cable, then I think you are not realy "extending" the wireless range in network language, but providing more access points that may happen to be located better for your wireless devices. Its extending in effect, but it may not be the right term for the network definitions.

The basic steps is to connect one of the TC LAN ports to your exiting router via a ethernet cable. You should have been provided with a CD that contians airport utility for the TC. Put the CD in, install the utility. Open it, and you should eventually see the TC show up in the left pane. You may or may not have to select it, but the setup assistant that opens will guide you through the settup. You want to add the TC to an existing network, setting it up as a access point. The hard drive in the TC can then be seen by anyone on your network. Open time machine on the Macs and it should find the TC, whether they are connected via the wired network or wireless.