Do I need to keep the Capsule plugged in to my cable modem in order to use it for backup?

The location of my cable modem is really inconvenient. I'd like to move the Capsule to a different room. Do I need to keep it connected to the cable modem in order to be able to use it as my Time Machine backup device?

I assume your cable modem is a router.. as such the TC should be wired to it in bridge. It will not do anything worse than now for the network in the house.. and the TC can then be accessed as per normal.
TC is designed to be plugged into the modem or main router by ethernet.
You can move it anywhere you like in the house as long as you have ethernet connection back to the modem.
You can run the TC by wireless .. it will have the following effects.
1. Super slow backups. It will simply reduce the current wireless speed by half or more for backups.
2. Since there is no QoS your internet will stop during backups. Or near to.
3. You will affect all wireless clients during the backups.
It can work, if your backups are very small.. but the TC becomes a near to useless dumb client in the network.. ethernet ports are off, wireless becomes mere client.. so you cannot even connect directly to it.
If you try the TC in stand alone.. ie a secondary network.. that can work.
1. The computer will then have backups or internet not both. You will need to deliberately connect to the TC to get backups working. That is assuming you use wireless.
2. You can do it with ethernet. and have internet by wireless. but the setup is tricky.. tell us if you want to proceed this way.
3. The problem is, the TC now becomes useless to the whole network and is only used by one computer. You may as well have bought a cheap USB drive, which is more reliable and faster.

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