Set Up Time Capsule as Wireless Router - Now How set up Time Machine?

Time Capsule is performing great as wireless base station set up today. Extended the network and added AirTunes Airport Express - everything works great.
Started Time Machine to configure the TC as the backup device for TM. Time Machine prompts me to "Set Up Time Capsule" and clicking that button brings me to Airport Utility. But there are no settings in the Airport Utility which allow me to configure the Time Capsule as the TM backup location.
Any ideas? Thanks.

Thanks for your reply and the article. It turns out the problem was that when I initially set up the Time Capsule in Airport Utility I checked the "not now" box when asked if I wanted to set up the TC for Time Machine backup. (I figured I could easily come back later to configure the TC for Time Machine.) I had to restart the AirPort Utility process and revert the TC to factory settings and then re-configure the TC while also setting up the wireless network and the Time Machine at same time. All is well now and after 6 hours overnight for the initial backup my iMac is backed up by TM on a regular schedule.

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    traceroute to 128.114.48.10 (128.114.48.10), 64 hops max, 52 byte packets
    1  10.0.1.1 (10.0.1.1)  0.952 ms  0.886 ms  3.428 ms
    2  67.170.200.1 (67.170.200.1)  43.269 ms  27.611 ms  21.004 ms
    3  te-7-1-ur01.scotts.ca.sfba.comcast.net (68.85.101.53)  11.252 ms  8.450 ms  9.778 ms
    4  te-1-5-0-7-ar01.sfsutro.ca.sfba.comcast.net (68.87.226.14)  15.026 ms  27.372 ms  15.516 ms
    5  he-3-9-0-0-cr01.sanjose.ca.ibone.comcast.net (68.86.91.45)  14.374 ms  17.450 ms  24.752 ms
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  • Okay so I set up my Time Capsule already and is now backing up 2 of my iMacs. Works great. What I want to know is how to use the TC to directly store files? I want to do this to delete some files but still have them on the TC for future reference..

    Okay so I set up my Time Capsule already and is now backing up 2 of my iMacs. Works great. What I want to know is how to use the TC to directly store files? I want to do this to delete some files on iMac 20inch but still have them on the TC for future reference..eg some movies on iTunes. I want to directly save them on the drive so I can delete them from iTunes and gain some storage. (Ps on iMac 20 inch (it's almost full - 320 GB) when I enter time machine, a tab comes up on finder which reads "Time Machine backups" it's able to be ejected like a disc or a connected device. On the iMac 20 inch, I dragged some files onto there as if using it like a hard drive. Is this the correct method? Then I went to my 27inch iMac and saw the "Time Machine Backups" hoping to see the files I dragged from the 20inch iMac. But the files were not there except a folder that said "Backups.backupdb". Can someone help me?

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