Old Time Capsule uses.

Question

We're a big family with four young kids, and I'm realizing that we're starting to outgrow our infrastructure.  We have a 2008 era 20" iMac w/ 320 GB that is full (lots of itunes movies and pictures mostly).  Our 500 GB 2nd Generation Time Capsule was also full.  Earlier this week I bought a new 2 TB Time Capsule.  It's now set up and running well wirelessly backing up both our iMac and my Macbook Air and doing our wifi (much better range now).  I didn't transfer over the data from the old Time Capsule, I just started fresh with the new one.  Eventually we'll probably buy a new iMac with a bigger HD and transition the current one to be a kids computer.  I'd like to put that off for a year or two if possible, though.  I was thinking I could use the old Time Capsule as an external HD to solve my full iMac problem and buy me some time. I don't think there would be a reason to use the wifi capabilities or have the old TC accesible from other computers (is there?).  So questions:
1. Process for turning the old TC into an external HD.  Is this doable?  Is it wise to simply erase my old TC backups now that i have new backups on the new TC. If so how do I do it? Should I connect it wireless or use ethernet cable to the iMac?  How do I turn off the network/wifi stuff in the old TC so it doesn't mess with my wifi network (or do I not want to do this)?  I saw some post that talked about conecting two TC's together with an ethernet cable- is this a better way? 
2.  What to put on the old TC/External HD if the above is figured out.  I've never used an external HD before.  It seems like the biggest bang for the buck would be to put our entire itunes library on the external if it can still function like it does now (primarily streaming movies/photos to ATV and streaming music to wireless speakers set up in the kitchen on an airport express).   Would still want the data on the old TC/external to be backed up automatically to the new TC via Time Machine.
That's probably enough to get started.  Sorry if it's too many questions all at once.  Thanks for any advice.

Answer 1

Our 500 GB 2nd Generation Time Capsule was also full.  Earlier this week I bought a new 2 TB Time Capsule.  It's now set up and running well wirelessly backing up both our iMac and my Macbook Air and doing our wifi (much better range now).  I didn't transfer over the data from the old Time Capsule, I just started fresh with the new one. 
This is IMHO the right way to go. Fresh new backups as long as there is nothing in the old backup you want then indeed erase the old TC.
I was thinking I could use the old Time Capsule as an external HD to solve my full iMac problem and buy me some time. I don't think there would be a reason to use the wifi capabilities or have the old TC accesible from other computers (is there?).  So questions:
IMHO this is the wrong way to go. Old TC power supply could be on the edge right now.. they have a service life of 3years and 3days. You won.. you got 4years out of it. Don't press your luck. Many died at 18months due to power supply failure.. and the hard disk also may die.
If you want an external HD.. buy one. USB3 drives are backwards compatible to USB2. You can get 2TB for less than $100. It will be faster, more reliable by far and work better as a data store. TM can then backup the files.. TM cannot backup files on the TC or any network drive. The TC cannot even back itself up.. other than a single archive of the whole disk manually initiated.
Let me make these clear in particular.
Big mistake moving itunes to the TC.. because it cannot be backed up.. because it is designed as data drive not streaming device.. it is slow to start the disk.. quick to spin it down. And did I mention no backup. Don't do this in particular. if you want to move itunes.. definitely go for the external drive.. and use best possible interface.. On an old 2008 imac that would be FW800, which is far superior to usb2. It is a dying standard but look at OWC etc for a FW800 case and put a 2TB drive in it.. cost a bit more than USB2 but for file storage and particularly fast access you will do much better.
The TC should be erased.. Just go to the airport utility on any computer and look at the erase option there.. do a one pass erase... so your data cannot be recovered and then I would just ebay it.
If you really want to set it up as external drive yes, but remember it is always a network drive.. you cannot plug in via USB.. it is tricky to setup unless you just bridge it and plug it by ethernet into the current Gen4 TC. You will then increase network traffic loading files onto it.
To use as independent external disk read the instructions at the bottom of this thread.. I have done screen shots to make it all clear there.
https://discussions.apple.com/thread/4817218?tstart=30
But I hope you won't do it.