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I think you would find it under Network.

In Time Machine, it would probably find it, and list it as a backup option for you.

I'm not in front of a Mac right now, so I cannot vouch for this.

Thanks, I had a look under my Finder preferences and found I had to turn on "Show Bonjour Computers" in the preferences, and now the drive is appearing under "Shared".
 
I'd like to test this out, but when I plug an external USB drive into my Airport Extreme, nothing happens. Should it appear on my sidebar in Finder (under "Devices") or do I need to access it some other way?

You can set it up using the AirPort Utility app (it's in the Utilities folder).
 
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