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How can a backup drive which you cannot boot from have any use?

Time Capsule is really geared at backing up more then one computer. I would not recommend it for one computer setup. That said, your comment about it not being bootable makes less sense. You can still restore any Mac that has been backed up through Time Machine, and this is it's purpose and what it was designed for.

You cannot start from TC and you cannot restore to a blown internal HDD. Until you replace the blown HDD, TC is useless.

Was wondering, is Time capsule a good choice for my iTunes files? Or is too slow to stream music and/ or video?

I'm pretty satisfied with my Buffalo LinkStation Pro at half the price.
http://www.buffalote...ion-pro-ls-xhl/

I did not see anything about archiving in the review. I don't know if it changed with the latest update, but I haven't seen much regarding the archive.
I can erase a disk, archive to it, but to connect it seems I just unplug it. It seems in the past I once had trouble restoring from it, but it may have been something I did. Still, this seems to be an area that doesn't get discussed and lacks info on.

Yes, you are correct, for starting up from a blown HD, it is pretty useless. Now please explain to me what solution would you suggest for backing up several individual Macs that could in essences boot each and every one of them? Do you get it. Per your description, even an external USB drive is useless, since you cant boot from it ether.

Not 'pretty useless'. Totally useless.

USB? You are wrong again. You can boot from external USB drives if they have been formatted in GUID. Apple specifically addresses that on its web site and I can confirm it works fine with late Tiger or any Leopard installation.

TC is at best flawed, at worst useless.

The optimal backup remedy for the home Mac user is a single USB (GUID) or FW external drive attached to each computer. Hard wired, not dependent on wireless connections which are subject to the whims of you cable or DSL provider. Cheap, too.

Thomaspin - For laptop based homes (we've a MacBook and an MB Pro), your advice is ill-considered. Only a small fraction of our computing is done in the office. Yes, one could park the computer to the hard drive at the end of the day. Further, the internal household network still functions even if the DSL connection is down. Verizon's giving me a flaky connection of late, but the internal network connection is fine.
For my money, AirPort Extreme + USB hard drive is the way to go. Our printer has ethernet and so plugs right into the APE. Doing everything hard wired would be a pain.
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"Does not meet my requirements" is not the same thing as "totally useless".

I have an external drive attached to my workhorse desktop machine for Time Machine backups, and a second one attached for a bootable image copy.

For the various laptops in the household, however, the Time Capsule is ideal, and for the reasons stated above -- user documents are backed up silently and continuously. Previously those machines got backed up only if I manually intervened.

If a laptop's internal drive should fail, I am comfortable reinstalling the system software from a DVD, then restoring user documents from the Time Capsule, since the laptops do not have a lot of customization or third-party software. However, I do also have a bootable portable hard drive as well.

I find the Time Capsule to be quite useful. Explain to me why I'm mistaken, or hold your tongue.

Depends on your storage volume. When my 1tB HDD goes down (with 600gB of data) I am up and running in 5 minutes from my backup. You are not.

As I said before, my desktop machine has a bootable external copy, so yes, I can be up and running in five minutes on the machine where that matters.

My family's laptops are important to them, but not "mission-critical" to the extent that they need bootable backup images. (And where exactly do those go on laptops, anyway?)

Once again, your needs may be different, but that doesn't make the Time Capsule "totally useless".

Your use of a bootable external copy confirms the uselessness of TC. It's simply redundant.