Optimal use of iTunes with Apple TV and Time Capsule

I’m undertaking a major “infrastructure” upgrade. This will involve Time Capsule and Apple TV. My current environment consists of 1 PowerBook and 1 Desktop PC running WIN XP. I’m running on a wireless network based off of an old Linksys Gateway (G-Cable). I’m backing up each device with separate external hard drives which are quite old. Shortly, I’ll be adding a 2nd Powerbook to the mix.
My configuration plan is to install Time Capsule to backup all of the devices. I will then add Apple TV to stream iTunes content to my TV. My current Powerbook contains my iTunes Library which is nearing 70G.
In regards to Apple TV, is it recommended to go with the 40G model and maintain the iTunes library on Time Capsule or other external drive?

5 Ghz may help avoid interference, but it also has shorter range, it depends on the circumstances surrounding your location whether it's a better option or not.

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    SSID/ESSUD (Network Name)
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    Encryption Mode
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    SSID/ESSUD = the Network Name of the Time Capsule's wireless network
    Authentication Method = the Wireless Security mode (WEP, WPA, or WPA2) of the Time Capsule's wireless network
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    Encryption Key = wireless security password of the TC's wireless network

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    I have the 160gig ATV, but I am not even close to finished copying my DVD library to my IMac and already have the 500gig full.
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    Welcome to the  Discussion Forums.
    If the time capsule can indeed be used for general storage then yes you can use it for your itunes library. I'd been wondering whether the time capsule HD can be used for general storage as well, I'd been hoping it could but didn't really know.
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