When I use the external hard drive for time machine, does the drive have to be dedicated to time machine only? or can I use the remaining space to save other stuff, such as musics or movies?
I believe you can partition it and spare a partition for things like music (this wasn't 100% verified, but appears to be true. The cost is that nothing on that other partition will get backed up (I think; this isn't 100% clear yet). You can look here for more info:
You might possibly also be able to get it to write to a folder on the drive (again, not backing up anything that's on that drive), although it isn't confirmed yet that this is in the release version of Leopard.
Also, the drive must be HFS+, according to the currently released info from Apple. You cannot use a FAT32 drive.